Prescott bank offers you a $33000 5 year loan at 8% annual interest. What is your...

Question

Question

Prescott bank offers you a $33000 5 year loan at 8% annual interest. What is your annual loan payment

business finance

Answer 1

Answer #1

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

33000=Annuity[1-(1.08)^-5]/0.08

33000=Annuity*3.992710037

Annuity=33000/3.992710037

which is equal to

=$8265.06(Approx).

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Answer 2

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