Loose-leaf for Fundamentals of Financial Accounting with Connect
Loose-leaf for Fundamentals of Financial Accounting with Connect
5th Edition
ISBN: 9781259619007
Author: Fred Phillips Associate Professor
Publisher: McGraw-Hill Education
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Chapter AC, Problem 7MC

Assume you bought a car using a loan that requires payments of $3,000 to be made at the end of every year for the next three years. The loan agreement indicates the annual interest rate is 6 percent. Which table in this appendix would you use to calculate the car’s equivalent cost if you were to pay for it in full today?

  1. a. Table C.1 (Future Value of $1)
  2. b. Table C.2 (Present Value of $1)
  3. c. Table C.3 (Future Value of Annuity of $1)
  4. d. Table C.4 (Present Value of Annuity of $1)

7. Assuming the facts in question 6, what is the car’s equivalent cost if you were to pay for it today? Round to the nearest hundred dollars.

  1. a. $2,600
  2. b. $3,600
  3. c. $8,000
  4. d. $9,600
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How To Calculate The Present Value of an Annuity; Author: The Organic Chemistry Tutor;https://www.youtube.com/watch?v=RU-osjAs6hE;License: Standard Youtube License