A debt of RM100,000 today is to be paid by payments of RM20,000, RM30,000, RM15,000, and the final amount of RM X, at the end of the 2nd year, 4th year, 6th year, and 8th year, respectively. Given the interest rate is 4% compounded semiannually. (a) Draw a time diagram to illustrate the equation of value. (b) Find X. 3.

A debt of RM100,000 today is to be paid by payments of RM20,000, RM30,000, RM15,000, and the final amount of RM X, at the end of the 2nd year, 4th year, 6th year, and 8th year, respectively. Given the interest rate is 4% compounded semiannually. (a) Draw a time diagram to illustrate the equation of value. (b) Find X. 3.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A debt of RM100,000 today is to be paid by payments of RM20,000, RM30,000,
RM15,000, and the final amount of RM X, at the end of the 2nd year, 4th year, 6th year,
and 8th year, respectively. Given the interest rate is 4% compounded semiannually.
(a) Draw a time diagram to illustrate the equation of value.
(b) Find X.
3.

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