Answer
$224,111 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
- 6.5% : r= 0.065
- 8 years : t = 8
i$=r/m=\frac{0.065}{12}$
$n=mt=12 \times 8 = 96$
3. Substitute the values and calculate the payment:
$PV = (3,000)\frac{1 - (1 + \frac{0.065}{12})^{-96}}{\frac{0.065}{12}} = 224,111$
