Respuesta :
A business signs a $100,000, 5% note that calls for four equal installments of $9259.
An annuity is what?
An annuity is a legal agreement between you and an insurance company under which you make a single payment or a series of payments in exchange for regular payments that could start right away or at some point in the future.
Calculation:
The amount borrowed by the company, P = $100,000
The rate, r = 5% = 5/100
r = 0.05
Payments made per year, m = 4
Number of years, t = 4
Number of payments, n = mt
n = 4(4)
n = 16
Present value of an annuity, PV = 3.5460
The regular payment can be calculated using the formula
[tex]PV=PMT\frac{1-(1+r)^{-n} }{r} \\1,00,000=PMT\frac{1-(1+0.05)^{-16} }{0.05} \\5,000=PMT(1-1.05^{-16} )\\5,000=PMT*0.54\\PMT=\frac{5000}{0.54} \\PMT=$9259[/tex]
Learn more about annuity with the help of the given link:
brainly.com/question/23554766
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