Question

Jones Co. borrowed money that is to be repaid in 12 years. So that the loan will be paid back at end of the 12th year, the company invests $8,000 at end of each year at 5% compounded annually. The amount of the original loan was :

a. $127,336.80
b. $70,905.60
c. $127,636.80
d. $70,950.60

Answer 1

The amount of the original loan was :

b. $70,905.60

Step-by-step explanation:

Loan Amount 70.905,60

Annual Interest Rate 5,00%

Term of Loan in Years 12

First Payment Date 31/10/2018

Payment Frequency Annual

Compound Period Annual

Payment Type End of Period

Annual Payment 8.000