2B. a. Suppose we have a four year fixed-payment loan with $900 payments made at the end of each year. Given a market interest rate of 7 percent, how much was initially borrowed?
2B.
a. Suppose we have a four year fixed-payment loan with $900 payments made at the end of each year. Given a market interest rate of 7 percent, how much was initially borrowed?
A loan is a type of credit vehicle in which a sum of money is lent to another party in exchange for future repayment of the loan's value or principal amount. In many circumstances, the lender will additionally add interest and/or financing charges to the principle value, which the borrower will have to repay in addition to the principal sum. Loans might be for a particular, one-time sum or for an open-ended line of credit up to a certain maximum. Loans come in a number of shapes and sizes, including secured, unsecured, commercial, and personal loans.
Step by step
Solved in 2 steps
