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A loan is set to be paid with a payment of $625 today and $250 in 18 months at 1.95% interest compounded monthly. Due to insufficient funds, the payments are refinanced. A first payment of $500 will be made in 9 months and a final payment in 24 months. What is the size of the final payment? Use the partial timeline below to help you. today 9 mo 18 mo 24 mo $625 $500 $250

A loan is set to be paid with a payment of $625 today and $250 in 18 months at 1.95% interest compounded monthly. Due to insufficient funds, the payments are refinanced. A first payment of $500 will be made in 9 months and a final payment in 24 months. What is the size of the final payment? Use the partial timeline below to help you. today 9 mo 18 mo 24 mo $625 $500 $250

Essentials Of Investments
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
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A loan is set to be paid with a payment of $625 today and $250 in 18 months at 1.95% interest compounded monthly. Due to insufficient funds, the payments are refinanced. A first payment of $500 will be made in 9 months and a final payment in 24 months. What is the size of the final payment? Use the partial timeline below to help you. today 9 mo 18 mo 24 mo $625 $500 $250
Transcribed Image Text:A loan is set to be paid with a payment of $625 today and $250 in 18 months at 1.95% interest compounded monthly. Due to insufficient funds, the payments are refinanced. A first payment of $500 will be made in 9 months and a final payment in 24 months. What is the size of the final payment? Use the partial timeline below to help you. today 9 mo 18 mo 24 mo $625 $500 $250
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