A company borrowed cash from the bank and signed a 6-year note at 7% annual interest.The present value for an annuity (series of payments) at 7% for 6 years is 4.7665.The present value of 1 (single sum) at 7% for 6 years is 0.6663.Each annual payment equals $8,400.The present value of the note is:
A) $26,652.00.
B) $40,038.60.
C) $40,540.00.
D) $5,596.92.
E) $190,660.00.
Correct Answer:
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