You borrow $42,500 over a nine year term.Your bank charges an annual rate of 10%.If the loan is repayable in equal end-of-period,annual payments,then what is the loan payment?
A) $7,379.72
B) $7,966.37
C) $6,916.68
D) $6,641.75
E) $8,117.70

Question

Quizplus · Accepted Answer

PV = PMT × 11ea7fdb_fc1e_e5bd_a768_0f0ac4909518_TB2902_11 PMT = PV / 11ea7fdb_fc1e_e5be_a768_2f750f767267_TB2902_11 PMT = 42,500 / 11ea7fdb_fc1f_0ccf_a768_23fe4687bebe_TB2902_11 = $7,379.72
Using a financial calculator:
N = 9, I = 10, PV = -42,500, FV = 0, cpt PMT = $7,379.72

You Borrow $42,500 Over a Nine Year Term