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A loan of $80,000 is due 10 years from today. The borrower wants to make annual...

A loan of $80,000 is due 10 years from today. The borrower wants to make annual payments at the end of each year into a sinking fund that will earn compound interest at an annual rate of 3 percent. How much must each annual payment be?

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Calculate the annual payment as follows PMT( 396, 10,-80000) Function Arguments PMT Rate 3% 0.03 Nper 10 10 Pv -80000 -80000 number Fv Type number 9378.440528 Calculates the payment for a loan based on constant payments and a constant interest rate Pv is the present value: the total amount that a series of future payments is worth now Formula result 9378.440528 OK Cancel Therefore, the annual payment is S9,378.4.4

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