Cal Lury owes $37,000 now. A lender will carry the debt for six more years at 7 percent interest. That is, in this particular case, the amount owed will go up by 7 percent per year for six years. The lender then will require that Cal pay off the loan over the next 14 years at 10 percent interest. What will his annual payment be?
Initial amount for consideration (P) = $37000
Rate of interest for 6 years (r) = 7%
Time (n) = 6 years
Amount owed after 6 years (A) = P * (1 + r)^n
Therefore, A = 37000 * (1.07)^6
A = 37000 * 1.501
A = 55,537
Now after six years,
rate of interest (r1) = 10%
time (n1) = 14 years
Let the amount (X) is paid at the end of each year (equal installments)
Please find the below table in excel showing year wise calculations. I have used Goal seek function under What If analysis in excel to obtain the value of X:
As per the calculations shown in the above table, the annual payment comes out to be $7,538.94
Hope this answers your question.
Cal Lury owes $37,000 now. A lender will carry the debt for six more years at...
Cal Lury owes $34,000 now. A lender will carry the debt for eight more years at 9 percent interest. That is, in this particular case, the amount owed will go up by 9 percent per year for eight yeers. The lender then will require that Cal pay off the loan over the next 16 years at 12 percent interest What will his annual payment be? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Annual payments
Someone borrowed 20,000 euros and agreed to pay off his debt after 7 years. At the end of the 3rd year he gives the lender 5,000 euros. What is the amount he is going to pay at the end of year 7, if the loan is compounded at an annual interest rate of 6%?
chapter 8
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13-19 odd please
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