After carefully going over your budget, you have determined you can afford to pay $922 per month toward a new sports car. You call up your local bank and find out that the going rate is 1 percent per month for 48 months. How much can you borrow

Answer: $35,036

Explanation: We will calculate the present value of $922 for a period of 48 months, thus:

Payment (pmt) = $922

n = 48

r = 1% or 0.01

PV = pmt ((1 - (1 : (1+r) ^n) / r)

PV = 922 ((1 - (1 : (1 + 0.01) ^48) / 0.01)

PV = 922 ((1 - (1 : (1.01^48) / 0.01)

PV = 922 ((1 - (1 : 1.612) / 0.01)

PV = 922 ((1 - 0.62) / 0.01)

PV = 922 (0.38/0.01)

PV = 922 (38)

PV = 35,036.

Therefore, the amount that can be borrowed is $35,036.