7. You owe your best friend $2,700. Because you are short on cash, you offer to repay the loan over 11 months under the following condition. The first payment will be $100 at the end of month one. The second payment will be $100+G at the end of month two. At the end of month three, you'll repay $100+2G. This pattern of increasing G amounts will continue for all remaining months. a. What is the value of G if the interest rate is 0.75% per month? b. What is the equivalent uniform monthly payment? c. Repeat Part (a) when the first payment is $130 (i.e., determine G). Please show all work and attempt to be correct please.
7. You owe your best friend $2,700. Because you are short on cash, you offer to repay the loan over 11 months under the following condition. The first payment will be $100 at the end of month one. The second payment will be $100+G at the end of month two. At the end of month three, you'll repay $100+2G. This pattern of increasing G amounts will continue for all remaining months. a. What is the value of G if the interest rate is 0.75% per month? b. What is the equivalent uniform monthly payment? c. Repeat Part (a) when the first payment is $130 (i.e., determine G). Please show all work and attempt to be correct please.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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7. You owe your best friend $2,700. Because you are short on cash, you offer to repay the loan over 11 months under the following condition. The first payment will be $100 at the end of month one. The second payment will be $100+G at the end of month two. At the end of month three, you'll repay $100+2G. This pattern of increasing G amounts will continue for all remaining months.
a. What is the value of G if the interest rate is 0.75% per month?
b. What is the equivalent uniform monthly payment?
c. Repeat Part (a) when the first payment is $130 (i.e., determine G).
Please show all work and attempt to be correct please.
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