Business, 15.02.2020 00:59, zach099

Ace Co. sold King Co. a $20,000, 8%, 5-year note that required five equal annual year-end payments. This note was discounted to yield a 9% rate to King. The present value factors of an ordinary annuity of $1 for five periods are as follows:

8% 3.992
9% 3.890
What should be the total interest revenue earned by King on this note?

A. $9,000
B. $8,000
C. $5,560
D. $5,050

Answers: 3

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Ace Co. sold King Co. a $20,000, 8%, 5-year note that required five equal annual year-end payments....