SOLUTION: A company borrows $75,000 which is to be repaid with equal payments semiannually for 10 years. The interest rate is 10%. Find the semiannual payments?
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Question 85535: A company borrows $75,000 which is to be repaid with equal payments semiannually for 10 years. The interest rate is 10%. Find the semiannual payments?
You can put this solution on YOUR website! A company borrows $75,000 which is to be repaid with equal payments semiannually for 10 years. The interest rate is 10%. Find the semiannual payments?
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Present Value Formula:
Present Value = (periodic payment)[1-(1+i)^-n]/i where i=periodic interest rate
75000 = PP[1-(1.05)^-20]/0.05
3750 = PP[0.62311..]
PP = $6018.19
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Cheers,
Stan H.
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