Annette has a loan that requires a $25,000 payment at the end of three years.The interest rate on
the loan is 5%,compounded annually.How much did Annette borrow today?

Name: Annette has a loan that requires a $25,000 payment at the end of three years.The interest rate on the loan is 5%,compounded annually.How much did Annette borrow today?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Present Value = Future Value * Interest Factor
Present Value = $25,000 * 0.8638 = $21,595
0.8638 is the interest factor on the Present Value table; n = 3; i = 5%

Annette Has a Loan That Requires a $25,000 Payment at the End