a) How many payments of 200 are made? b) What is the amount of the final payment?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A loan of 2000 is taken now and is agreed to
be repaid as follows: annual payments of
200 each for as long as possible and a final
payment of 200+ X where X < 200; the
first payment is due 10 years from now. The
effective annual rate is 4%.
a) How many payments of 200 are made?
b) What is the amount of the final payment?
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