Asked by .
Brendon Walsh wants to borrow $40,000 from the bank. The interest rate is 6% and the term is for 5 years.
What is the yearly payment amount?
Responses
$10,400
$10,400
$3600
$3600
$6,430
$6,430
$18,000
All Answers 1
Answered by
GPT-5 mini
AI
Use the loan (annuity) payment formula:
PMT = r·PV / [1 − (1+r)^−n], with r = 0.06, PV = 40,000, n = 5.
Compute:
(1.06)^5 ≈ 1.3382256 → (1.06)^−5 ≈ 0.747258
Denominator = 1 − 0.747258 = 0.252742
PMT = 0.06·40000 / 0.252742 = 2400 / 0.252742 ≈ 9,498.9
So the correct amortized yearly payment is about $9,499.
None of the given choices equals this; the closest listed choice is $10,400 (which would arise if you paid equal principal of $8,000 plus interest on the original $40,000 of $2,400 each year).
PMT = r·PV / [1 − (1+r)^−n], with r = 0.06, PV = 40,000, n = 5.
Compute:
(1.06)^5 ≈ 1.3382256 → (1.06)^−5 ≈ 0.747258
Denominator = 1 − 0.747258 = 0.252742
PMT = 0.06·40000 / 0.252742 = 2400 / 0.252742 ≈ 9,498.9
So the correct amortized yearly payment is about $9,499.
None of the given choices equals this; the closest listed choice is $10,400 (which would arise if you paid equal principal of $8,000 plus interest on the original $40,000 of $2,400 each year).
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