You have borrowed 25000 at an interest rate of 16 Equal paym

You have borrowed $25,000 at an interest rate of 16%. Equal payments will be made over a three-year period. (The first payment will be made at the end of the the first year). What will be the annual payment?

Solution

P = $25,000

i = 16%

n = 3 years

A = P(A/P , i , n)

   = 25,000(A/P , 16% , 3)

   = 25,000 x 0.4453

A = $11,132.50

Therefore, the annual payment is $11,132.50