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Mariulka [41]
3 years ago
7

"If you borrow $8,000 with an interest rate of 4 percent, to be repaid in five equal yearly payments at the end of the next five

years, what would be the amount of each payment? Use Exhibit 1-D. (Round time value factor to 3 decimal places and final answer to 2 decimal places.)"
Business
1 answer:
Akimi4 [234]3 years ago
4 0

Answer:

The payments will be of 1,797.02 dollars

Explanation:

We need tyo calcualte the PTM of an ordinary annuity which present value is 8,000. The time will be 5 years and the discount rate 4%

PV \div \frac{1-(1+r)^{-time} }{rate} = PTM\\

PV  $8,000.00

time 5 years

rate 4% = 4/100 = 0.04

8000 \times \frac{1-(1+0.04)^{-5} }{0.04} = PTM\\

PTM:  $ 1,797.017

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