1920

(Related to Checkpoint 6.1 ) (Annuity payments) A firm borrows $25,000 from the bank at 13 percent compounded annually to purchase some new machinery. This loan is to be repaid in equal annual installments at the end of each year over the next 10 years. How much will each annual payment be? The amount of each annual payment will be $. (Round to the nearest cent.) (Present value of an annuity due) Determine the present value of an annuity due of $2,000 per year for 8 years discounted back to the present at an annual rate of 15 percent. What would be the present value of this annuity due if it were discounted at an annual rate of 20 percent? a. If the annual discount rate is 15 percent, the present value of the annuity due is $. (Round to the nearest cent.) b. If the annual discount rate is 20 percent, the present value of the annuity due is $ (Round to the nearest cent.)