On December 31, Beth Klemkosky bought a yacht for $50,000. She paid $12,000 down and agreed to pay the balance in 5 equal annual installments that include both the principal and 7 percent interest on the declining balance. How big will the annual payments be?

a.On December 31, Beth Klemkosky bought a yacht for $50,000 and paid $12,000 down, how much does she need to borrow to purchase the yacht?

Answer: $38,000

b. If Beth agrees to pay the loan plus 7 percent compound interest on the unpaid balance over the next 5 years in 5 equal end-of-year payments, what will those equal payments be?

$ ?

(Round to the nearest cent.)