Answer:
$6,185.31
Explanation:
Value of debt at end of 4 years = $25,000 * (1 + 10%)^4
Value of debt at end of 4 years = $25,000 * (1.10^4)
Value of debt at end of 4 years = $25,000 * 1.4641
Value of debt at end of 4 years = $36,602.50
Let x be the annual payments
x * [1 - (1 + 13%)^-12] / 13% = $36,602.50
x * [1 - (1.13)^-12] / 13% = $36,602.50
x * [1 - 0.2307059] / 13% = $36,602.50
x * 0.7692941/0.13 = $36,602.50
x * 5.91764692 = $36,602.50
x = $36,602.50/5.91764692
x = 6185.313266375142
x = $6,185.31
So therefore, his annual payment will be $6,185.31.
