American_Bankers_Association
CTFA · Question #266
You are considering borrowing $10,000 for 3 years at an annual interest rate of 6%. The loan agreement calls for 3 equal payments, to be paid at the end of each of the next 3 years. (Payments…
The correct answer is C. $3741. See the full explanation below for the reasoning.
Investment Management
Question
You are considering borrowing $10,000 for 3 years at an annual interest rate of 6%. The loan agreement calls for 3 equal payments, to be paid at the end of each of the next 3 years. (Payments include both principal and interest.) The annual payment that will fully pay off (amortize) the loan is closest to:
Options
- A$2674
- B$2890
- C$3741
- D$4020
How the community answered
(33 responses)- A15% (5)
- B9% (3)
- C73% (24)
- D3% (1)
Topics
#loan amortization#annuity payments#present value#interest calculation
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