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You plan to borrow $385,000 now and repay it in 25 equal annual installments (payments will...

You plan to borrow $385,000 now and repay it in 25 equal annual installments (payments will be made at the end of each year). If the annual interest rate is 12%, how much will your annual payments be?

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Answer #1

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

385000=Annuity[1-(1.12)^-25]/0.12

385000=Annuity*7.843139112

Annuity=385000/7.843139112

=$49087.49(Approx).

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