Answer
$231,844 is the largest amount the company can borrow from Industrial Bank.
Work Step by Step
1. Write the formula for the loan borrow value (Present Value):
$PV = PMT\frac{1 - (1 +i)^{-n}}{i}$
2. Identify the values:
$PMT = 3,000$
- Monthly payment: m = 12
- 9.5% : r= 0.095
- 10 years : t = 10
i$=r/m=\frac{0.095}{12}$
$n=mt=12 \times 10 = 120$
3. Substitute the values and calculate the payment:
$PV = (3,000)\frac{1 - (1 + \frac{0.095}{12})^{-120}}{\frac{0.095}{12}} = 231,844$
