A loan of $2000 is to be repaid at the end of each of the next 5 years at an annual interest rate of .06. Find the annual payment.

• 445
• 470
• 475
• 490
• 503

References

Hlynka, Myron. "University of Windsor Old Tests 62-392 Theory of Interest". web2.uwindsor.ca. Retrieved November 23, 2023.

Solution: C

[[math]]\$ 2000=K a_{\overline{5} \mid .06} \implies K=2000 / a_{\overline{5} \mid .06}=\frac{2000(.06)}{1-1.06^{-5}}=474.79[[/math]]

References

Hlynka, Myron. "University of Windsor Old Tests 62-392 Theory of Interest". web2.uwindsor.ca. Retrieved November 23, 2023.