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Question 13 Not yet answered Points out of 3.75 (NOTE: ENTER YOUR ANSWER WITHOUT THE $ AND COMMA, ROUNDED TO THE NEAREST DOLL

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Answer #1

Annual payment = Amount of Loan/Present value annuity factor

= 1,900,000/PVAF(7%, 12 years)

= 1,900,000/7.94268629

= $239,213.78

Hence, annual payment = $239,213.78

Amount required today is equal to the present value of future amount required

= 85099/(1+4%)^5

= $69.945.17

Hence, amount required to be deposited today = $69.945.17

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