Respuesta :
Answer:
The annual repayment is what the question required,which is $ 28,200.79
Step-by-step explanation:
The amount the company at year end would include the original amount of principal which is $25,000 ($100,000/4 years ), as well as the interest payable at 5% cost of borrowing.
The actual repayment requires at each year end is the original loan of $100,000 divided by the present value of four annual payments discounted at 5% which is 3.5460
Annual repayment=$100,000/3.5460=$28,200.79
Interest yearly=$28,200.79-$25,000.00=$3,200.79
The regular periodic payment = $9259
The amount borrowed by the company, P = $100,000
The rate, r = 5% = 5/100
r = 0.05
Number of payments in a year, m = 4
Number of years, t = 4
Number of payments, n = mt
n = 4(4)
n = 16
Present value of annuity, PV = 3.5460
The regular payment can be calculated using the formula
[tex]PV=PMT\frac{1-(1+r)^{-n}}{r} \\\\100000=PMT\frac{1-(1+0.05)^{-16}}{0.05}\\\\5000=PMT(1-1.05^{-16})\\\\5000=PMT(0.54)\\\\PMT=\frac{5000}{0.54} \\\\PMT=9259[/tex]
The regular periodic payment = $9259
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