Homework Question Help Needed

Business & Finance
Tutor: None Selected Time limit: 1 Day

Determine the equal, annual, end of year payment required over the life of the following loans to repay them fully during the stated term. Loan B = $70,000 Principal/ 15% Interest Rate/ 7 yrs. Term of loan. What is the annual payment? (Round to nearest cent)

Jun 25th, 2015

Thank you for the opportunity to help you with your question!

  • Annual Payment = P / [ ( 1 - (1/(1+i)^n) ) / i ]
  • "P" represents the principal amount; "i" represents the interest rate; and "n" represents the length of the loan in years.
70000/{(1-1/(1+0.15)^7)})/0.15

70000/[1-(1/2.66))0.15

70000/(1-0.376)/0.15

70000/(0.624/0.15)

70000/4.16=16826.92

answer is 16826

Please let me know if you need any clarification. I'm always happy to answer your questions.
Jun 25th, 2015

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