Suppose you borrowed $12,000 at a rate of 9% and must repay it in 4 equal installments at the end of each of the next 4 years.How much would your payments be?
A)$3,704.02
B)$3,889.23
C)$4,083.69
D)$4,287.87

Question

Quizplus · Accepted Answer

The correct payment amount can be calculated using the formula for the annuity payment with a fixed interest rate: $PMT = \frac{P \times r}{1 - (1 + r)^{-n}}$, where $P$ is the principal amount ($12,000), $r$ is the annual interest rate divided by the number of periods per year (9% or 0.09), and $n$ is the total number of payments (4). Plugging these values into the formula gives the annual payment amount, which is approximately $3,704.02.

Suppose You Borrowed $12,000 at a Rate of 9% and Must