A company must repay the bank $42,000 cash in five years for a loan. The loan ag
ID: 2381652 • Letter: A
Question
A company must repay the bank $42,000 cash in five years for a loan. The loan agreement specifies 7% interest compounded annually. The present value factor for five years at 7% is 0.7130. How much cash did the company receive from the bank on the day they borrowed this money?
A company must repay the bank $42,000 cash in five years for a loan. The loan agreement specifies 7% interest compounded annually. The present value factor for five years at 7% is 0.7130. How much cash did the company receive from the bank on the day they borrowed this money?
Explanation / Answer
$27,300