This Question: 1 pt 2 of 8 This Quiz: 8 pts possibl Question Help e the loan You

Question

This Question: 1 pt 2 of 8 This Quiz: 8 pts possibl Question Help e the loan You have a loan outstanding. It requires making nine annual payments of $3,000 each at so that instead of making the nine payments as originally will make payment will the bank require vy agd, you will make only one final payment in nine years. If the interest rate on the loan is 7%, what fa payment will the bank require you to make so that it is indifferent to the two forms of payment? The final payment the bank will equire you to make is ( Round to the nearest dollar)

Explanation / Answer

Future value = Annuity * [ ( 1 + r)n - 1] / r

Future value = 3000 * [ ( 1 + 0.07)9 - 1] / 0.07

Future value = 3000 * 11.977989

Future value = $35,934

The final payment will be $35,934

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