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Cooley Landscaping Company needs to borrow $23,000 for a new​ front-end dirt loader. The bank is...

Cooley Landscaping Company needs to borrow $23,000 for a new​ front-end dirt loader. The bank is willing to loan the funds at 7​% interest with annual payments at the end of the year for the next 7 years. What is the annual payment on this loan for Cooley​ Landscaping?

A) What is the annual payment on this loan for Cooley​ Landscaping?

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Answer #1

Present value of annuity=Annuity[1-(1+interest rate)^-time period]/rate

23000=Annuity[1-(1.07)^-7]/0.07

23000=Annuity*5.389289402

Annuity=23000/5.389289402

=$4267.72(Approx).

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