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Given a Present Worth of an amount borrowed, P = $17,000, an interest rate, i=5%, and...

Given a Present Worth of an amount borrowed, P = $17,000, an interest rate, i=5%, and a time period, n=6 years, calculate the unknown Uniform Series payment amount, A=? per year.

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Answer #1

equivalent annual cost = (NPV x i) / (1-(1+i)-n)

in this case NPV = 17000, i=.05, n=6

thus EAC = (17000*.05) / (1-(1+.05)-6) = $3349.2970

Hence, the uniform payment for the given time period 6 years for the amount $ 17000 at 5% interest rate is $3349.2970

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