An individual borrows $4,500 from the bank to be repaid in three equal annual installments, with the first installment to be paid one year after the loan amount is received. If interest on the loan is charged at a rate of 9 per cent per annum compounded annually, to the nearest dollar the annual installment is a. $1,259 b. $1,373 c. $1,778 d. $1,631
An individual borrows $4,500 from the bank to be repaid in three equal annual installments, with the first installment to be paid one year after the loan amount is received. If interest on the loan is charged at a rate of 9 per cent per annum compounded annually, to the nearest dollar the annual installment is a. $1,259 b. $1,373 c. $1,778 d. $1,631
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 26P
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An individual borrows $4,500 from the bank to be repaid in three equal annual installments, with the first installment to be paid one year after the loan amount is received. If interest on the loan is charged at a rate of 9 per cent per annum compounded annually, to the nearest dollar the annual installment is
a. |
$1,259 |
|
b. |
$1,373 |
|
c. |
$1,778 |
|
d. |
$1,631 |
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