A small business owner visits his bank to ask for a loan. The owner states that he can repay a loan at $2,000 per month for the next three years and then $1,000 per month for two years after that. If the bank is charging customers 9.75 percent APR, how much would it be willing to lend the business owner

$78,443.29

Explanation:

we need to use the present value of an annuity formula:

the formula used to determine the present value factor of an annuity is:

present value annuity factor = [1 - 1/(1 + i)ⁿ ] / i

we must divide this into 2 parts:

the first part will deal with the $2,000 monthly payment

the second part deals with the $1,000 monthly payment

i = 9.75% / 12 = 0.8125%

n (first part) = 36

n (second part) = 24

the PV annuity factor for first part = [1 - 1/(1 + 0.8125%)³⁶ ] / 0.8125% = 31.1043

the PV annuity factor for first part = [1 - 1/(1 + 0.8125%)²⁴ ] / 0.8125% = 21.7251

loan = ($2,000 x 31.1043) + ($1,000 x 21.7251)//(1 + 0.8125%)³⁶ = $62,208.60 + $16,234.69 = $78,443.29

= [1 - 1/(1 + 0.0069942)240 ] / 0.0069942 = 116.135183    

the answer choices are:

provides online banking

provides automatic payment services

provides home loans by using saving accounts

accept tax return refunds

hopefully someone can answer the question now lol

since the options are not listed, when you are working on your budget you should also add water, tv, internet, miscellaneous and your 'fun' money for in your budget. when budgeting, you need to allow for fun money, and mis/accidental money so that you stick to the budget and not go crazy because you feel strapped to the budget.