What amount can you borrow if you make six quarterly payments of $4,000 at a 12% annual rate of interest? (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.) A) $24,838.00 B) $21,668.80 C) $44,800.00 D) $40,000.00 E) $31,049.00

Question

Quizplus · Accepted Answer

Using the present value annuity factor table with a 12% interest rate and six periods, we find the factor to be 4.1114. 
So, $4,000 multiplied by 4.1114 equals $16,445.6, which is the present value of the six payments. 
Therefore, the maximum amount that can be borrowed is $16,445.6, which is closest to choice B ($21,668.80).

What Amount Can You Borrow If You Make Six Quarterly