Question:
Canliss Mining Company borrowed money from a local bank. The note the company signed requires five
annual installment payments of $10,000 beginning one year from today. The interest rate on the note is
7%. What amount did Canliss borrow?
Answer:
PVA = $10,000 (4.10020) = $41,002
Present value of an ordinary annuity of $1: n =5, i = 7% (from Table 4)
Canliss Mining Company borrowed money from a local bank. The note the company signed requires five
annual installment payments of $10,000 beginning one year from today. The interest rate on the note is
7%. What amount did Canliss borrow?
Answer:
PVA = $10,000 (4.10020) = $41,002
Present value of an ordinary annuity of $1: n =5, i = 7% (from Table 4)
