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. |
| Dinero Bank offers you a $24,000, 8-year term loan at 7 percent annual interest. |
Solution
Though question is incomplete, as it doesnt specify what answer it is looking for. But generally in these type of questions, every year interest payment for 8 years asked to be calculated.
we can calulate the annuity(A) by using the formula:
Given, Present Value of Loan= $24000, Period(n) = 8years, r (interest)= 7%
A= r (PV)/ 1- (1+r)^(-n)
= 0.07*24000/ 1-(1.07)^(-8)
=$4019.23 Ans
