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Compute annual payment

Intermediate term loan for 1,000,000 to be paid off in equal installments at the end of each of the next 5 years. The interest rate is 14%, what is the annual payment.

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Solution Preview

We have to use annuity formula to solve the problem.

PVA = W x 1 - 1 where PVA is the present value of loan

Solution Summary

This solution is comprised of a detailed explanation to answer what is the annual payment.