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A loan of $12,500 is made at an effective interest rate of 8.5%. Payments are made at the end of each interest period. Each payment equals twice the interest due until the borrower pays off the outstanding debt with a final payment of, at most, $1800. Find the number of payments n and the amount the final payment. ** Answers are n=24 and final payment = $1758.02.

A loan of $12,500 is made at an effective interest rate of 8.5%. Payments are made at the end of each interest period. Each payment equals twice the interest due until the borrower pays off the outstanding debt with a final payment of, at most, $1800. Find the number of payments n and the amount the final payment. ** Answers are n=24 and final payment = $1758.02.

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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Plz don't use excel.
A loan of $12,500 is made at an effective interest rate of 8.5%. Payments are made at the end of each interest period. Each payment equals twice the interest due until the borrower pays off the outstanding debt with a final payment of, at most, $1800. Find the number of payments n and the amount of the final payment. ** Answers are n=24 and final payment = $1758.02. Please no excel. Steps would be very helpful. Thank you!
Transcribed Image Text:A loan of $12,500 is made at an effective interest rate of 8.5%. Payments are made at the end of each interest period. Each payment equals twice the interest due until the borrower pays off the outstanding debt with a final payment of, at most, $1800. Find the number of payments n and the amount of the final payment. ** Answers are n=24 and final payment = $1758.02. Please no excel. Steps would be very helpful. Thank you!
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