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Your bank offers you a 10-year loan, with annual payments of $10,000 starting 1 year from...

Your bank offers you a 10-year loan, with annual payments of $10,000 starting 1 year from today. If the annual interest rate is 6.7%, compounded annually, what is the principal amount of the loan?

Solutions

Expert Solution

the principal amount of the loan is

=PMT*((1-(1+r)^(-n))/r)

=10000*((1-(1+6.7%)^(-10))/6.7%)

=71220.25

jeff jeffy answered 2 years ago
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