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18 January, 12:13

Hometown Builders is borrowing $195,000 today for four years. The loan is an interest-only loan with an APR of 7.65 percent. Payments are to be made annually. What is the amount of the first annual payment

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  1. 18 January, 13:19
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    Answer: $14,917.50

    Explanation:

    Amount Borrowed = $195,000

    Years = 4 Years

    APR = 7.65% = 0.0765

    Therefore

    Payment Year 1 = (Amount Borrowed x APR)

    Payment Year 1 = ($195,000 x 0.0765)

    Payment Year 1 = $14,917.50
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