Question

Accenture Corporation borrowed $300,000 from the bank by signing a 5-year, 8% installment note. The present value of an annuity factor at 8% for 5 years is 3.9927. To the nearest dollar, the annual payment is Select one:

A. $24,000
B. $60,000
C. $19,964
D. $75,137
E. $37,500

Answer 1

The annual payment for Accenture Corporation's 5-year, 8% installment note is calculated by dividing the borrowed amount of $300,000 by the present value of an annuity factor for 5 years at 8%, which is 3.9927. this results in a payment of $75,137 to the nearest dollar.

Step-by-step explanation:

The question pertains to the calculation of the annual payment required for an installment note. Accenture Corporation borrowed $300,000 from the bank by signing a 5-year, 8% installment note. Given the present value of an annuity factor at 8% for 5 years is 3.9927, the annual payment can be calculated by dividing the borrowed amount by the present value annuity factor.

To find the annual payment, we divide the principal amount ($300,000) by the annuity factor (3.9927): $300,000 / 3.9927 = $75,137.15. To the nearest dollar, the annual payment is $75,137.

Therefore, the correct answer is D. $75,137.