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zaharov [31]
3 years ago
6

If you borrow $7,500 with an interest rate of 7 percent to be repaid in six equal payments at the end of the next 6 years, what

would be the amount of each payment? Use Exhibit 1-D
Business
1 answer:
sertanlavr [38]3 years ago
5 0

Answer:

$1,573.27

Explanation:

We can compute an equal annual payment by using the annuity formula.

P = \frac{A(1-(1+r)^{-n}) }{r}

where P = the amount borrowed

r = interest rate

n = tenor (number of periods)

A = the annual equal payment

= 7,500 = \frac{A(1-(1.07)^{-6}) }{0.07}

= 7,500 = (A * (1 - 0.6663))/0.07

= 7,500 = (A * 0.3337)/0.07

= A = 7,500*0.07/0.3337

= A = Each Annual Payment = $1,573.27.

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Answer:

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Answer:

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Explanation:

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