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16 October, 12:28

A company purchased equipment and signed a 7-year installment loan at 9% annual interest. The annual payments equal $9,000. The present value of an annuity for 7 years at 9% is 5.0330. The present value of the loan is:

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  1. 16 October, 13:59
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    The present value of the loan is $45,297

    Explanation:

    Instalment (A) = $9,000.00

    PV factor (B) = 5.033

    Present value of loan (A x B)

    =$ 45,297
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