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A company borrowed cash from the bank and signed a 6-year note at 7% annual interest. The present value for an annuity (series of payments) at 7% for 6 years is 4.7665. The present value of 1 (single sum) at 7% for 6 years is 0.6663. Each annual payment equals $8,400. The present value of the note is:

Respuesta :

Answer:

Explanation:

Present value of note = Annual payment x present value annuity factor

Annual payment = 8,400

PVAF = 4,7665

= $ 8,400 x 4.7665

= $ 40,038.60

So, the present value of note is $ 40,038.60

okpalawalter8

A company borrowed cash from the bank and signed a 6-year note at 7% annual interest, The present value of the note is mathematically given as

PV=$ 40,039.

What is the present value of the note?

Generally, the equation for the Present Value of the note is mathematically given as

PV = APx value annuity factor

Therefore

PV= $ 8,400 x 4.7665

PV=$ 40,039.

In conclusion, the present value

PV=$ 40,039.

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