Suppose we are at end of 9th year
Outstanding balance at the end of year 9 (PV) = (-$22,000)
Outstanding balance at the end of year 12 (FV) = $15,000
No of annual payments made from year 9 to year 12 (N) = 3
Effective annual interest rate (I) = 8%
Therefore annual payment (PMT) = ?
Using financial calculator or PMT function in excel,
Annual payment (PMT) = $ 3,916.23
(Please note that PV is taken negative. Its like assuming loan is given at the end of 9th year and repaid at the end of 12th year.)
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