Homework Answers
Answer (Option B is correct)
The yearly instalment is $13000 for five years.
The present value of the instalment sum for five years is:
$13000 ˣ PVFA (9%,5y)
= $13000 ˣ 3.890
= $50570...................A
The present value of investment after 5 years for $10000
= $10000 ˣ PV (9%, 5y)
= $10000 ˣ .650
= $6500......................B
Total liability of Balsman is A+B = $50570 +$6500 = $57070
After making the payment of first instalment the remaining liability is
$57070 ‐$13000 = $44070
Answer option B is correct
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