Gwen Taylor borrows $50,000 from her bank on January 1 . She is to repay the loan in equal annual installments over 30 years. How much is her annual repayment if the bank charges 10 percent interest? Present value tables or a financial calculator are required
a. $1,667
b. $4,200
c. $2,865
d. $5,304
D
Using the Present Value of Annuity Table (10%, 30 years), the constant is 9.4269.
$50,000/9.4269 = $5,304
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