9. A company borrows 1,000,000 at an annual effective discount rate of 4%. The loan is to be repaid with n annual payments of 100,000 plus a drop payment one year after the nth payment. The first payment is due two years after the loan is taken out. Calculate the amount of the drop payment. A 87.072.14 B 90,700.14 C 94,479.31 D 98,415.95 E 99,999.99
9. A company borrows 1,000,000 at an annual effective discount rate of 4%. The loan is to be repaid with n annual payments of 100,000 plus a drop payment one year after the nth payment. The first payment is due two years after the loan is taken out. Calculate the amount of the drop payment. A 87.072.14 B 90,700.14 C 94,479.31 D 98,415.95 E 99,999.99
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
Related questions
Question
Qd 93.
![9. A company borrows 1,000,000 at an annual effective discount rate of 4%. The loan is
to be repaid with n annual payments of 100,000 plus a drop payment one year after the
nth payment. The first payment is due two years after the loan is taken out. Calculate
the amount of the drop payment.
A 87.072.14
B 90,700.14
C 94,479.31
D 98,415.95
E 99,999.99](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F323c9976-6b7b-4414-aa82-41105edc66ec%2F829d2f3e-d04f-423c-ba20-0b87e59a0fcb%2Farbbb1h_processed.jpeg&w=3840&q=75)
Transcribed Image Text:9. A company borrows 1,000,000 at an annual effective discount rate of 4%. The loan is
to be repaid with n annual payments of 100,000 plus a drop payment one year after the
nth payment. The first payment is due two years after the loan is taken out. Calculate
the amount of the drop payment.
A 87.072.14
B 90,700.14
C 94,479.31
D 98,415.95
E 99,999.99
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