Answer:
$1,573.27
Explanation:
We can compute an equal annual payment by using the annuity formula.
[tex]P = \frac{A(1-(1+r)^{-n}) }{r}[/tex]
where P = the amount borrowed
r = interest rate
n = tenor (number of periods)
A = the annual equal payment
= [tex]7,500 = \frac{A(1-(1.07)^{-6}) }{0.07}[/tex]
= 7,500 = (A * (1 - 0.6663))/0.07
= 7,500 = (A * 0.3337)/0.07
= A = 7,500*0.07/0.3337
= A = Each Annual Payment = $1,573.27.
