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Russell Company has acquired a building with a loan that requires payments of $22,500 every six months for 4 years. The annual interest rate on the loan is 10%. What is the present value of the building? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Answer :

Tundexi

Answer:

$145,422

Explanation:

n = 4 * 2 =  8 periods

i = 10% / 2 = 5%

Present value of the building = $22,500 * PVAF(8%, 5%)

Present value of the building = $22,500 * 6.4632

Present value of the building = $145,422

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