Loan repayment plan
Uniform annual payment = 325,000
Repayment starts in Year 2 and ends in Year 16
So there will 15 annual uniform payments.
How much the bank is willing to loan if interest is 6%?
Calculate the Present Worth of the annual uniform payments.
PW = A (P/A, 6%, 15) (P/F, 6%, 1)
PW = 325,000 (9.71225) (0.94340)
PW = 2,977,824.4
The bank will be willing to loan the developer a sum of $2,977,824.4
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