Question

Fatima just borrowed 111,412 dollars. She plans to repay this loan by making a special payment of 30,056 dollars in 4 years and by making regular annual payments of 13,870 dollars per year until the loan is paid off. If the interest rate on the loan is 13.61 percent per year and she makes her first regular annual payment of 13,870 dollars immediately, then how many regular annual payments of 13,870 dollars must Fatima make? Round your answer to 2 decimal places (for example, 2.89, 14.70, or 6.00).

Answer 1

Amount borrowed	$ 111,412.00
Less:
PV of $30,056	$    18,041.18	=30056/(1+13.61%)^4
Loan repaid through annual payments	$    93,370.82

Hence, It will take 12.87 payments to payoff the loan