Lowlife Company defaulted on a $190,000 loan that was due on December 31, 2018. The bank has agreed to allow Lowlife to repay the $190,000 by making a series of equal annual payments beginning on December 31, 2019. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Required:
1. Calculate the required annual payment if the bank’s interest rate is 10% and four payments are to be made.
2. Calculate the required annual payment if the bank’s interest rate is 8% and five payments are to be made.
3. If the bank’s interest rate is 10%, how many annual payments of $27,885 would be required to repay the debt?
4. If three payments of $69,117 are to be made, what interest rate is the bank charging Lowlife?