A loan of £12,000 is repaid by annual payments of £1,000 each at the end of the year. How long does it take to repay the loan on the basis of an interest rate of 1% p.a.? Enter an answer correct to 2 decimal places years £ Suppose the payment at t What is the value of the payment at t = 12? = 12 is increased to repay the loan (a balloon payment). £ Enter an answer correct to 2 decimal places = Alternatively, the loan may be repaid via a payment at t = 13? What is the value of the payment at t = Enter an answer correct to 2 decimal places 13 (a drop payment).
A loan of £12,000 is repaid by annual payments of £1,000 each at the end of the year. How long does it take to repay the loan on the basis of an interest rate of 1% p.a.? Enter an answer correct to 2 decimal places years £ Suppose the payment at t What is the value of the payment at t = 12? = 12 is increased to repay the loan (a balloon payment). £ Enter an answer correct to 2 decimal places = Alternatively, the loan may be repaid via a payment at t = 13? What is the value of the payment at t = Enter an answer correct to 2 decimal places 13 (a drop 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
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:A loan of £12,000 is repaid by annual payments of £1,000 each at the end of the year.
How long does it take to repay the loan on the basis of an interest rate of 1% p.a.?
Enter an answer correct to 2 decimal places
years
£
Suppose the payment at t
What is the value of the payment at t = 12?
=
12 is increased to repay the loan (a balloon payment).
£
Enter an answer correct to 2 decimal places
=
Alternatively, the loan may be repaid via a payment at t
= 13?
What is the value of the payment at t =
Enter an answer correct to 2 decimal places
13 (a drop payment).
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