You borrow $456,996.03 at an annual interest rate of 4.12%, compounded once every year. If you...
| You borrow $456,996.03 at an annual interest rate of 4.12%, compounded once every year. If you have 5 years to pay off the loan, what must be your per period payment? | |||||||||||||
Homework Answers
Period Payment = Loan / PVAF(r%, n)
PVAF is sum of PVF(r%,n)
PVAF = PVF (4.12%,1) + PVF(4.12%,2) +... + PVF(4.12%,5)
PVF(4.12%, 1) = 1 / (1.0412^1)
PVF(r%,n) = 1 / ( 1 + r)^n
= $ 456,996.06 / PVAF (4.12%, 5)
= 456,996.06 / 4.4369
= $ 103,000
Annual Paymnet is $ 103,000
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