Question

Brainstorm Company purchased office furniture and equipment for $20,000 and agreed to pay for the purchase by making six annual installment payments beginning one year from today. The installment payments include interest at 6%. What is the required annual installment payment?

Answer 1

Answer:

The required annual installment payment is $4067.25.

Explanation:

annual installment = (20000×6%)/(1 - (1 + 6%)^6)

                               = $4067.25

Therefore, the required annual installment payment is $4067.25.