Homework SourseDinero Bank offers you a 24000 8year term loan at 7 percent
| Dinero Bank offers you a $24,000, 8-year term loan at 7 percent annual interest. |
| Required: |
| What will your annual loan payment be? |
| Dinero Bank offers you a $24,000, 8-year term loan at 7 percent annual interest. |
Solution
Annuity = (r*PV) / [1 - (1 + r)-n]
= (0.07 x $24,000) / [1 - 1.07-8]
= $1,680/0.418 = $4,019.23
Thus, the annual loan payment = $4,019.23
