George Bush makes annual end-of-year payments of $5,043.71 on a four-year loan with an interest rate of 13 percent.The original principal amount was
A)$24,462
B)$15,000
C)$3,092
D)$20,175

Question

Quizplus · Accepted Answer

The original principal can be calculated using the formula for the present value of an annuity. Given the annual payment, interest rate, and loan term, the calculation shows that the original principal is approximately $15,000.

George Bush Makes Annual End-Of-Year Payments of $5,043