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Canliss Mining Company borrowed money from a local bank. The note the company signed requires five annual installment payments of $10,000 beginning today. The interest rate on the note is 7%. What amount
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Canliss Mining Company borrowed money from a local bank. The note the company signed requires five annual installment payments of $10,000 beginning today. The interest rate on the note is 7%. What amount did Canliss borrow

User Manikanta Reddy
by
4.5k points

1 Answer

5 votes

Answer:

$43,872.11

Step-by-step explanation:

The amount borrowed can he found by finding the present value of the annuity .

Present value is the sum of discounted cash flows.

Present value can be calculated using a financial calculator

Cash flow each year from year 1 to 4 = $10,000

I = 7%

Present value = $43,872.11

User REMITH
by
4.4k points
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