What amount can you borrow if you make seven semiannual payments of $4,000 at an 8% annual rate of interest? (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.) A) $25,760.00 B) $28,000.00 C) $35,691.20 D) $31,049.00 E) $24,008.40

Question

Quizplus · Accepted Answer

The present value of an annuity formula is used to calculate the amount you can borrow. With a semiannual interest rate of 4% (8% annual rate divided by 2) and 7 periods, the present value annuity factor is used to find the present value of $4,000 payments. The correct calculation results in $24,008.40.

What Amount Can You Borrow If You Make Seven Semiannual