1 An individual is borrowing $120,000 at 4% interest compounded annually. The loan is to be repaid in equal annual payments over 25 years. However, just after the eighth payment is made, the lender allows the borrower to triple the annual payment. The borrower agrees to this increased payment. If the lender refinances at 3% per year, compounded annually, starting just after the eighth payment, on the unpaid balance of the loan, what is the balance still owed just after the twelfth payment is made?

1 An individual is borrowing $120,000 at 4% interest compounded annually. The loan is to be repaid in equal annual payments over 25 years. However, just after the eighth payment is made, the lender allows the borrower to triple the annual payment. The borrower agrees to this increased payment. If the lender refinances at 3% per year, compounded annually, starting just after the eighth payment, on the unpaid balance of the loan, what is the balance still owed just after the twelfth payment is made?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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