Homework Answers
Amount of borrowed = $635.52
Amount to be paid in future = $1,000
Interest rate (i) = 12%
Time period (n) = ?
Amount of borrowed = Amount to be paid in future x Present value factor (12%, n)
635.52 = 1,000 x Present value factor (12%, n)
Present value factor (12%, n) = 0.63552
By looking at the Present value factor table, we can find that factor value 0.63552 at 12% interest rate lies in the row of 4 year.
Number of years = 4
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