Answer:
$45,195
Explanation:
we need to calculate the present value of the annuities:
first we must determine the PV (in 3 years) of the 24 $500 payments:
PV = payment x annuity factor (PV annuity, 1%, 24 periods) = $500 x 21.243 = $10,621.50
now we need to calculate the PV of $10,621.50:
PV = $10,621.50 / (1 + 12%)³ = $7560.17
finally we must calculate the PV of the 36 initial $1,250 payments:
PV = payment x annuity factor (PV annuity, 1%, 36 periods) = $1,250 x 30.108 = $37,635
The bank should lend her $7,560 + $37,635 = $45,195
