Your firm intends to finance the purchase of a new construction crane. The cost is $1,500,000. What is the size of the first payment if the crane is financed with an interest-only loan at an annual rate of 8.50%?
A) $228,611.56
B) $127,500.00
C) $3,391,475.16
D) There is not enough information to answer this question.
Answer: B
Explanation: B) PMT = r × PV = .085 × $1,500,000 = $127,500.
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