A company borrowed $50,000 cash from the bank and signed a 6-year note at 7%. Th

Question

A company borrowed $50,000 cash from the bank and signed a 6-year note at 7%. The present value factor for an annuity for 6 years at 7% is 4.7665. The annual annuity payments equal $10,490. The present value of the loan is:        $10,490
       $11,004
       $50,000
       $52,450
       $238,325 A company borrowed $50,000 cash from the bank and signed a 6-year note at 7%. The present value factor for an annuity for 6 years at 7% is 4.7665. The annual annuity payments equal $10,490. The present value of the loan is:

Explanation / Answer

present value of the loan = 10490*4.7665 = $50,000

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