Present Value of an Annuity

1) Suppose you borrowed $12,000 at an annual rate of 6 percent interest to buy a car and wish to repay it in five equal payments at the end of each of the next five years. Which of the following is the closest to the amount of each of these payments?

A) $2,364

B) $2,849

C) $2,544

D) $2,436

2) What would be the interest rate on a loan of $39,927.10 that you paid off with annual payments of $10,000 for each of the next five years?

A) 4%

B) 6%

C) 8%

D) 10%

E) 12%

3) How much did you borrow if your annual payments are $5,000 for the next seven years and the interest rate is 9%?

A) $25,164.76

B) $36,002.17

C) $19,140.20

D) $27,797.84