The following table shows a portion of a four-year amortization schedule. A 4-year amortization schedule. The loan amount or pri
1 answer:
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Answer:
$64,474.20
Explanation:
As for the information provided,
discount rate = 7.25%
First payment will be made at the end of year 1
Discounting factor =
Thus, current value of payment = = $26,107.20
Discounting factor for receipts =
Year 1 = = $28,000
0.9324 = 26,107.20
Year 2 =
Year 3 =
Therefore, value of contract today = - $26,107.20 + $26,107.20 + $30,429.0 + $34,045.20 = $64,474.20