Marigold, Inc. owes $32,800 to Ritter Company. How much would Marigold have to pay each year...

Marigold, Inc. owes $32,800 to Ritter Company. How much would Marigold have to pay each year if the debt is retired through four equal payments (made at the end of the year), given an interest rate on the debt of 11%? (Round factor values to 5 decimal places, e.g. 1.25124. Round answers to the nearest whole dollar, e.g. 5,275.)

Expert Solution

To Find the value of the annual payments to be made by Marigold Inc, we need to divide the principle amount with the Present value annuity factor of 11% for 4 years.

Present value annuity factor of 11% for 4 years is 3.10245

Therefore, Annual payments to be made = 32,800 / 3.10245 = 10572.29

Marigold has to pay $10,572 every year to Ritter Company

ekkarill92 answered 2 years ago

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