Betty borrows $50,000 at 10 percent annually compounded interest to be repaid in four equal annual installments.The actual end of year loan payment is: (Round to the nearest whole dollar)
A) $10,774
B) $12,500
C) $14,340
D) $15,774

Question

Quizplus · Accepted Answer

PV = PMT × 11ea7fdb_fc18_a4a1_a768_89c8dc14df37_TB2902_11 PMT = PV / 11ea7fdb_fc18_a4a2_a768_8de43a8908c0_TB2902_11 PMT = 50,000 / 11ea7fdb_fc18_cab3_a768_65b91a339106_TB2902_11 = $15,773.54
Using a financial calculator:
N = 4, I/Y = 10, PV = -50,000, FV = 0, cpt PMT = $15,773.54

Betty Borrows $50,000 at 10 Percent Annually Compounded Interest to Be