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13 December, 11:00

On January 1, Year 1, Turner Company borrowed $58,000 from Lessing Inc. and signed a three-year installment note to be paid in three equal payments at the end of each year. The present value of an annuity of $1 for 3 periods at 7% is 2.62432. What is the amount of the installment payment?

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  1. 13 December, 11:15
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    Per year installment shall be $22,101

    Explanation:

    By using annuity formula we have

    P=$58,000

    Annuity Factor=2.62432

    P=Installment*2.62432

    $58,000=Installment*2.62432

    Installment=$58,000/2.6243

    Installment per year=$22,101
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