A loan has an initial balance of $100,000 and has interest charged at 8% compounded annually. You are going to pay the loan back with even payments in years 1, 2, 3, 4, 6, 7, 8, and 9. Find the payment amount.
$17965 |
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$15965 |
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$11965 |
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$13965 |
Let annual loan payment amount be A, then as per given condition
A *(P/A,8%,4) + A *(P/A,8%,4)*(P/F,8%,5) = 100000
A *3.312127 + A * 3.312127*0.680583 = 100000
A *5.5663043 = 100000
A = 100000 / 5.5663043
A = 17965.24 ~ 17965
First option is correct answer
A loan has an initial balance of $100,000 and has interest charged at 8% compounded annually....
A loan has an initial balance of $100,000 and has interest charged at 8% compounded annually. You are going to pay the loan back with even payments in years 1, 2, 3, 4, (no payment year 5), 6, 7, 8 and 9. Find the payment amount.
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