41 An engineer borrowed $3000 from the bank, payable in six equal end-of-year payments at 8%. The bank agreed to reduce the interest on the loan if interest rates declined before the loan was fully repaid. After the third payment, the bank agreed to reduce the interest rate on the remaining debt to 6.25% a) What was the amount of the equal annual 8% end-of-year payments for each of the first 3 years? b) What was the balance due after the 3rd payment? c) What was the amount of the equal annual end-of-year payments for each of the last 3 years?

41 An engineer borrowed $3000 from the bank, payable in six equal end-of-year payments at 8%. The bank agreed to reduce the interest on the loan if interest rates declined before the loan was fully repaid. After the third payment, the bank agreed to reduce the interest rate on the remaining debt to 6.25% a) What was the amount of the equal annual 8% end-of-year payments for each of the first 3 years? b) What was the balance due after the 3rd payment? c) What was the amount of the equal annual end-of-year payments for each of the last 3 years?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Please no written by hand and no image

4-41 An engineer borrowed $3000 from the bank, payable in six equal end-of-year payments at 8%. The
bank agreed to reduce the interest on the loan if interest rates declined before the loan was fully repaid.
After the third payment, the bank agreed to reduce the interest rate on the remaining debt to 6.25%
a) What was the amount of the equal annual 8% end-of-year payments for each of the first 3
years?
b) What was the balance due after the 3rd payment?
c) What was the amount of the equal annual end-of-year payments for each of the last 3 years?

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