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eimsori [14]
3 years ago
8

You have borrowed $28,000 at an interest rate of 12% compounded annually. Equal payments will be made over a four-year period, w

ith each payment made at the end of the corresponding year. What is the amount of the annual payment foe the second year?
Business
1 answer:
Sloan [31]3 years ago
6 0

Answer:

A = 28000 [\frac{0.12 (1.12)^4}{(1.12)^4 -1}]

A = 28000 [\frac{0.12*1.574}{1.574-1}]

A=28000*0.3292 = 9218.564

So then the annual pay would be $ 9218.564 for this case

Explanation:

For this question we can use the Equivalent annual value (A) given by the following expression:

A = PV [\frac{i (1+i)^t}{(1+i)^t -1}]

Where PV = 28000 represent the pesent value

i = 0.12 since the rate is yearly

t = 4 since we have 4 years to pay

So then we have everything to replace and we got:

A = 28000 [\frac{0.12 (1.12)^4}{(1.12)^4 -1}]

A = 28000 [\frac{0.12*1.574}{1.574-1}]

A=28000*0.3292 = 9218.564

So then the annual pay would be $ 9218.564 for this case

And this amount would be paid each year in order to pay all the money after 4 years.

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The Journal entry is as follows:

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A common size analysis requires the representation of financial statement data relative to a single financial statement item (or
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Answer:

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2 years ago
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