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Loan Payment: Time Value of Money

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A home buyer signed a 20-year, 8% mortgage for $72,500. Given the following information, how much should the annual loan payments be?

Present value of $1 PVIF = .2
Future value of $1 FVIF = 5.
Present value of annuity PVIFA = 9.818
Future value of annuity FVIFA = 46.0

A) $5,560
B) $7,384
C) $8,074
D) $13,900

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Solution Summary

The solution calculates the annual payment for a mortgage.

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