Question

Jane borrows $250,000 to be paid off on an installment basis over fifteen years beginning one year from today. The loan payments are annual and the interest is at 4.5% compounded annually. What is the amount of each payment?

Select one:

a. $12,485.27

b. $23,278.44

c. $20,796.54

d. $16,666.67

Answer 1

Correct Answer:

Option B : $ 23,278.44

working:

Formula for calculation of EMI on Loan
EMI = P*R*(1+R)^N / [(1+R)^N -1]
A	P	$        2,50,000
B	R	4.5%
C	N	15
D = (1+B)^C	(1+R)^N	1.935
E =A*B*D	P*R*(1+R)^N	21771.92748
F =D-1	(1+R)^N - 1	0.935
G =E/F	EMI	$      23,278.44

                                                                                                                                                                        

End of Answer.

Thanks