What amount can you borrow if you make six quarterly payments of $4,000 at a 12% annual rate of interest? (PV of $1,FV of $1,PVA of $1,and FVA of $1)$\bold{\text{(Use appropriate factor(s)from the tables provided.)}}$
A)$24,838.00
B)$21,668.80
C)$31,049.00
D)$40,000.00
E)$44,800.00

Question

Quizplus · Accepted Answer

Using the formula for the future value of an annuity:
FV = Pmt x ((1 + i)^n - 1) / i

Where:
Pmt = $4,000
i = 12% / 4 = 3% per quarter
n = 6 quarters

FV = $4,000 x ((1 + 0.03)^6 - 1) / 0.03
FV = $25,114.19

Using the formula for the present value of a single amount:
PV = FV / (1 + i)^n

Where:
FV = $25,114.19
i = 12% / 4 = 3% per quarter
n = 6 quarters

PV = $25,114.19 / (1 + 0.03)^6
PV = $21,668.80

Therefore, the answer is B) $21,668.80.

What Amount Can You Borrow If You Make Six Quarterly (Use appropriate factor(s)from the tables provided.)\bold{\text{(Use appropriate factor(s)from the tables provided.)}}(Use appropriate factor(s)from the tables provided.)

What Amount Can You Borrow If You Make Six Quarterly $\bold{\text{(Use appropriate factor(s)from the tables provided.)}}$