Homework Answers
We have to get the Annual level payment which is received per year for 11 years and finally balance gets zero. So,
| formula : Annual level Payment = P * i * (1+i)^n / (1+i)^n - 1 | ||||||
| Annual level Payment = 20700 * 0.08 * (1+0.08)^11 / (1+0.08)^11 - 1 | ||||||
| Annual level Payment = 1656 * (1.08)^11 / (1.08)^11 - 1 | ||||||
| Annual level Payment = 1656 * 2.331639 / 2.331639 - 1 | ||||||
| Annual level Payment = 3861.194184 / 1.331639 | ||||||
| Annual level Payment = 2899.58 or 2900 | ||||||
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