A company must repay the bank a single payment of $35,000 cash in 3 years for a loan it entered into. The loan is at 6% interest compounded annually. The present value of 1 (single sum) at 6% for 3 years is 0.8396. The present value of an annuity (series of payments) at 6% for 3 years is 2.6730. The present value of the loan (rounded) is:
A. $49,345.
B. $29,386.
C. $93,555.
D. $13,094.
E. $35,000.
Answer: B
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