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Q13 Someone offers to buy your car for five, equal annual payments, beginning 3 years from...

Q13

Someone offers to buy your car for five, equal annual payments, beginning 3 years from today. If you think that the present value of your car is $8,000 and the interest rate is 12%, what is the minimum annual payment that you would accept?

Multiple Choice

  • $2,648.53

  • $2,839.24

  • $3,123.16

  • $2,783.86

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Homework Answers

Answer #1

Given,

Present value = $8000

Interest rate (r) = 12% or 0.12

No. of annual payments (n) = 5

Solution :-

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