$50,000 is borrowed,to be repaid in three equal,annual payments with 10% interest.Approximately how much principal is amortized with the first payment?
A) $2,010.60
B) $5,000.00
C) $15,105.74
D) $20,105.74

Question

Quizplus · Accepted Answer

Payment = $50,000 / [1 / 0.1 − 1 / 0.1(1.1)³]Payment = $20,105.74Principal payment = $20,105.74 − ($50,000 × 0.1)Principal payment = $15,105.74

$50,000 Is Borrowed,to Be Repaid in Three Equal,annual Payments with 10