A 20 year loan is being repaid in equal annual ins he amount of interest in the last payment is $90. T wment is $2000. alculate the size of the payment.

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
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QUESTION 1
A 20 year loan is being repaid in equal annual instalments of principal (capital) and
interest. The amount of interest in the last payment is $90. The amount of principle in the secor
to-last payment is $2000.
a) Calculate the size of the payment.
b) Calculate the force of interest for the loan. (
c) Calculate the size of the loan immediately after the second payment.
Transcribed Image Text:QUESTION 1 A 20 year loan is being repaid in equal annual instalments of principal (capital) and interest. The amount of interest in the last payment is $90. The amount of principle in the secor to-last payment is $2000. a) Calculate the size of the payment. b) Calculate the force of interest for the loan. ( c) Calculate the size of the loan immediately after the second payment.
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