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Problem 6.25 (Solution Video) Sunland Productions borrowed some money from the Californa Finance Company at a rate o 15.4 percent or seven-year per od The loan calls or ฮ payment o $1,541,000 each year beginning today. How much did Sunland borrow? (Round factor values to 4 decimal places, e.g. 1.5214 and final answer to nearest whole dollar, e.g. 5,275.) Sunland borroweds

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Answer #1

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

=1.154*1,541,000[1-(1.154)^-7]/0.154

=1,541,000*4.7441

=$7,310,658(Approx).

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