(3)
present value = {$77000 x PVF(7%,1)} + {$114500 x PVF(7%,2)} + {$152000 x PVF(7%,3)}
= ($77000 x 0.9345794393) + ($114500 x 0.8734387283) + ($152000 x 0.8162978769)
= 71,962.6168224299 + 100,008.7343872827 + 124,077.2772874095
= $296,048.6284971221
where,
PVF(7%,1) = 0.9345794393
PVF(7%,2) = 0.8734387283
PVF(7%,3) = 0.8162978769
(4a)
principal amount of note payable = $180000 - $36000 = $144000
therefore,
present value of the annuity = annuity x PVAF(7%,5)
annuity = $144000/4.10020
= $35120.24
where,
PVAF(7%,5) = 4.10020
(4bj
total amount of interest expense = ($35120.24 x 5) - $144000
= $31601.20
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