A loan of £8,200 is to be repaid over a 11-year contract by three initial payments of £2,000, £2,000 and £4,000 at the end of years 2, 4 and 9, respectively. Hence, find a final amount £X at the end of year 11 that needs to be paid to fully clear the debt given that the lender charges an annual nominal rate of interest of 9.0% convertible monthly. ( correct answer = 8972.45, no tables, please, ONLY formulas)
A loan of £8,200 is to be repaid over a 11-year contract by three initial payments of £2,000, £2,000 and £4,000 at the end of years 2, 4 and 9, respectively. Hence, find a final amount £X at the end of year 11 that needs to be paid to fully clear the debt given that the lender charges an annual nominal rate of interest of 9.0% convertible monthly. ( correct answer = 8972.45, no tables, please, ONLY formulas)
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 of £8,200 is to be repaid over a 11-year contract by three initial payments of £2,000, £2,000 and £4,000 at the end of years 2, 4 and 9, respectively.
Hence, find a final amount £X at the end of year 11 that needs to be paid to fully clear the debt given that the lender charges an annual nominal rate of interest of 9.0% convertible monthly. ( correct answer = 8972.45, no tables, please, ONLY formulas)
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