The number of more payments Mr. Kirov will have to make before the balance is 0 is 5 payments.
This can be calculated using the formula for calculating the present value of an ordinary annuity as follows:
PV = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (1)
Where;
PV = Present value or the first balance = $800
P = Monthly payment = $100
r = Monthly interest rate = 0.012
n = number of months or number of payments = ?
Substitute the values into equation (1) and solve for n, we have:
$800 = $100 * ((1 - (1 / (1 + 0.012))^n) / 0.012)
$800 / $100 = (1 - (1 / 1.012)^n) / 0.012
8 * 0.012 = 1 - 0.988142292490119^n
0.096 = 1 - 0.988142292490119^n
Rearranging, we have:
0.988142292490119^n = 1 – 0.096
0.988142292490119^n = 0.904
Taking the log of both sides, we have:
nlog0.988142292490119 = log0.904
n = log0.904 / log0.988142292490119
n = -0.04383156952463670 / -0.00518051250378013
n = 8.46085585019890000
Approximating to a whole number, we have:
n = 8
Since three payments have already been made from the question, the number of more payments he will have to make before the balance is 0 can be calculated as follows:
Number of more payments = n – 3 = 8 – 3 = 5
Therefore, the number of more payments he will have to make before the balance is 0 is 5 payments.
Learn more about the present value of an ordinary annuity here: https://brainly.com/question/13369387.
