The Moose Lodge can afford to pay $12,000 at the end of each of the next 30 years to repay a mortgage on their hotel property. If the interest rate is 5.50%, what is the most The Moose Lodge can borrow?

Question

Quizplus · Accepted Answer

The most The Moose Lodge can borrow is calculated using the present value of an annuity formula, which factors in the annual payment, interest rate, and number of periods. Given the annual payment of $12,000, an interest rate of 5.50%, and a term of 30 years, the correct calculation results in option A, $174,404.94, as the maximum amount that can be borrowed.

The Moose Lodge Can Afford to Pay $12,000 at the End