Pv of Annuity Example 1
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Example 1 :
Suppose you determine that you can pay $5,000 per year on a loan. If the loan is for a period of six years and the interest charged is 5% per year, how much can you borrow?
Answer :
Using Exhibit 4 page 656 : $5,000 * 5.07569 = $25,378.45 5.07569 : PV of annuity of $1 for 6 periods at 5%
Suppose you determine that you can pay $5,000 per year on a loan. If the loan is for a period of six years and the interest charged is 5% per year, how much can you borrow?
Answer :
Using Exhibit 4 page 656 : $5,000 * 5.07569 = $25,378.45 5.07569 : PV of annuity of $1 for 6 periods at 5%
