Jill borrows $17,000 from you today. She agrees to repay you in two equal amounts, the...
Jill borrows $17,000 from you today. She agrees to repay you in two equal amounts, the first to occur in 3 years from today and the other in 8 years from today. If the interest rate is 5.0% per annum compounding monthly, what will be the amount of each repayment?
Homework Answers
Let 2 equal payments = x
Rate per month = 5%/12
PV of these payments = x/(1+5%/12)3*12 + x/(1+5%/12)8*12 = 17000
x* (0.860976+0.670877) = 17000
x = 11097.67
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