8. Your brother-in-law borrowed $2,000 from you 4 years ago and then disappeared. Yesterday he returned and expressed a desire to pay back the loan, including the interest accrued. Assuming that you had agreed to charge him 10% annual interest and he wishes to make 5 equal annual payments beginning one year from now, how much will he need to pay you annually in order to pay off the debt? (Assume that the loan continues to accrue interest at 10% per y
8. Your brother-in-law borrowed $2,000 from you 4 years ago and then
disappeared. Yesterday he returned and expressed a desire to pay back the loan,
including the interest accrued. Assuming that you had agreed to charge him 10%
annual interest and he wishes to make 5 equal annual payments beginning one year
from now, how much will he need to pay you annually in order to pay off the
debt? (Assume that the loan continues to accrue interest at 10% per year.)
Future Value
Future Value is the value which is measured at a specified date at a given interest rate, it can be calculated over a lumpsum period of payment done on annuity basis.
If Lumpsum amount invested then Future value = Present Value x (1+r)^n
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