Present value of annuity calculations are widely used for loan amortization and capital recovery problems. Both loan amortization and capital recovery problems require the calculations of annuity payments based on a given required rate of return. Suppose you take out a loan. The process in which your debt will be paid off in equal installments consisting of proportionate amounts of principal and interest is called capital recovery amortization Ian loaned his friend $30,000 to start a new business. He considers this loan to be an investment, and therefore requires his friend to pay him an interest rate of 5% on the loan. He also expects his friend to pay back the loan over the next four years by making annual payments at the end of each year. Ian texted and asked that you help him calculate the annual payments that he should expect to receive so that he can recover his initial investment and earn the agreed-upon 5% on his investment Calculate the annual payment and complete the following capital recovery schedule: Beginning Amount Principal Paid Interest Year Payment Paid Ending Balance 1 $30,000.00 2 4 $0.03