Dan buys a property for $250,000.He is offered a 20-year loan by the bank,at an interest rate of 6% per year.What is the annual loan payment Dan must make?
A)$21,796.14
B)$24,864.98
C)$32,684.66
D)$64,486.34

Question

Quizplus · Accepted Answer

The annual loan payment can be calculated using the formula for an annuity payment: P = [r*PV] / [1 - (1 + r)^-n], where P is the payment, r is the annual interest rate (0.06), PV is the present value ($250,000), and n is the number of payments (20). Plugging in the values, the annual payment is approximately $21,796.14.

Dan Buys a Property for $250,000