How much did you borrow if your annual payments are $5,000 for the next seven years and the interest rate is 9%?
A)$25,164.76
B)$36,002.17
C)$19,140.20
D)$27,797.84

Question

Quizplus · Accepted Answer

The present value of an annuity formula is used to calculate the amount borrowed: PV = PMT × [(1 - (1 + r)^-n) / r]. Plugging in the values: PMT = $5,000, r = 0.09, n = 7, the calculation gives approximately $25,164.76.

How Much Did You Borrow If Your Annual Payments Are