The Solution to This Problem Requires Time Value of Money

Multiple Choice

The solution to this problem requires time value of money calculations. Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. Cory and Ginger want to buy an airplane. They find one that will cost $200,000. They must pay 10% down, and can get the balance financed with a 10 year loan at 7% interest and annual payments. What is their annual payment?

A) $26,826
B) $24,457
C) $25,626
D) $19,260