You are purchasing a car. You are scheduled to make 3 annual installments of $3,000 per...

Question

Question

You are purchasing a car. You are scheduled to make 3 annual installments of $3,000 per year, starting at the end of this yea

business finance

Answer 1

Answer #1

Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate

=3000[1-(1.1)^-3]/0.1

=3000*2.48685199

=$7460.56(Approx).

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Answer 2

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