A company must repay the bank a single payment of 26000 cash

A company must repay the bank a single payment of $26.000 cash in 3 years for a loan it entered into. The loan is et 9% interest compounded annually. The present value factor for 3 years at 9% is 07722, The present value of the loon (rounded is: O $33.020. O $18.980 O $23660 O $20077 O $26.000 References Multiple Choice O Type here to search

Solution

Present value of loan=$26000*Present value of discounting factor(9%,3)

=$26000*0.7722

which is equal to

=$20077(Approx).