On August 1, a $60,000, 7%, 3-year installment note payable is issued by a company. The note requires equal payments of principal plus accrued interest be paid each year on July 31. The present value of an annuity factor for 3 years at 7% is 2.6243. The present value of a single sum factor for 3 years at 7% is 0.8163. The payment each July 31 will be:

Multiple Choice

1. $20,000.00.

2. $22,863.24.

3. $20,800.00.

4. $20,400.00.

5. $2,863.10.