Answer:
Her Yearly Repayment will be approximately $5771
Explanation:
For an Amortized Loan, to calculate the payment amount per period, we use the formula:
A=[P(1+r)ⁿ]/[(1+r)ⁿ-1]
where A=Payment per period
P= Initial Principal/Loan Amount
r= Interest rate per period
n= number of payments period
From the information provided,
P=$20000
n=4 years
r=6%=0.06
Therefore Yearly Repayment Amount A=[Pr(1+r)ⁿ]/[(1+r)ⁿ-1]
=[20000X0.06(1+0.06)⁴]/[(1+0.06)⁴-1]
=[1200(1.06)⁴]/[(1.06)⁴-1]
=[1200X1.2625]/[1.2625-1]
=1515/0.2625
=$5771.43
