Your car loan requires payments of $200 per month for the first year and payments of $400 per month during the second year. The annual interest rate is 12% and payments begin in one month. What is the present value of this 2-year loan?
A) $6,246.34
B) $6,389.78
C) $6,428.57
D)$6,753.05

Question

Quizplus · Accepted Answer

PV = {$200 {(1/.01) - [1/.01(1.01)¹²]}} + ({$400 {(1/.01) - [1/.01(1.01)¹²]}/1.01¹²)}PV = $6,246.34

Your Car Loan Requires Payments of $200 Per Month for the First