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What is the most you can borrow on a 5-year loan at 4.25% APR you can...

What is the most you can borrow on a 5-year loan at 4.25% APR you can afford payments of $300 per month?
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Answer #1

We can find the answer using present value of annuity formula:

Where,
PVA = Present value of annuity
A = Annuity or payment
i = Interest rate in decimal form
a = Number of payments in a year
n = Number of years

Substituting the values, we get:

Therefore, the most you can borrow is $16,190.35.

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