2. A present obligation of $20,000 is to be repaid in equal uniform annual amounts, each of which includes repayment of the debt principal and interest on the debt, over a period of five years. If the interest rate is 10% per year, what is the amount of the annual repayment?

2. A present obligation of $20,000 is to be repaid in equal uniform annual amounts, each of which includes repayment of the debt principal and interest on the debt, over a period of five years. If the interest rate is 10% per year, what is the amount of the annual repayment?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

2. A present obligation of $20,000 is to be repaid in equal uniform annual
amounts, each of which includes repayment of the debt principal and
interest on the debt, over a period of five years. If the interest rate is 10%
per year, what is the amount of the annual repayment?
3. You have an investment opportunity that costs $35,000 and eight years
later pays a lump-sum amount of $100,000. What interest rate per year
would be earned on this investment?

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