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You get a student loan of $20,000 with an annual interest rate of 6% where you make a payment once a year. You plan to pay off the loan in 5 years (get the loan in year O and then payments in year 1 through year 5). What is the amount of each payment?

You get a student loan of $20,000 with an annual interest rate of 6% where you make a payment once a year. You plan to pay off the loan in 5 years (get the loan in year O and then payments in year 1 through year 5). What is the amount of each payment?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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You get a student loan of $20,000 with an annual interest rate of 6% where you make a payment once a year. You plan to pay off the loan in 5 years (get the loan in year 0 and then payments in year 1 through year 5). What is the amount of each payment? A = $20,000 (A/P, 6%, 1) A = $20,000 (A/P, 6%, 5) A = $20,000 (A/F, 6%, 5) O A = $20,000 (A/F, 6%, 6) None of the answers here are correct
Transcribed Image Text:You get a student loan of $20,000 with an annual interest rate of 6% where you make a payment once a year. You plan to pay off the loan in 5 years (get the loan in year 0 and then payments in year 1 through year 5). What is the amount of each payment? A = $20,000 (A/P, 6%, 1) A = $20,000 (A/P, 6%, 5) A = $20,000 (A/F, 6%, 5) O A = $20,000 (A/F, 6%, 6) None of the answers here are correct
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