Ali borrowed $3000 from the bank, payable in six equal end-of-year payments at 8%. The bank agreed to reduce the interest on the loan if interest rates declined in the country before the loan was fully repaid. At the end of 3 years, at the time of the third payment, the bank agreed to reduce the interest rate from 8% to 7% on the remaining debt. What was the amount of the equal annual end-of-year payments for each of the first 3 years? And What was the amount of the equal annual ?end-of-year payments for each of the last 3 years .A and $627.28 $648.90 .B and $637.28 $648.90
Ali borrowed $3000 from the bank, payable in six equal end-of-year payments at 8%. The bank agreed to reduce the interest on the loan if interest rates declined in the country before the loan was fully repaid. At the end of 3 years, at the time of the third payment, the bank agreed to reduce the interest rate from 8% to 7% on the remaining debt. What was the amount of the equal annual end-of-year payments for each of the first 3 years? And What was the amount of the equal annual ?end-of-year payments for each of the last 3 years .A and $627.28 $648.90 .B and $637.28 $648.90
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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The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
Question
Transcribed Image Text:Ali borrowed $3000 from the bank, payable in six equal
end-of-year payments at 8%. The bank agreed to
reduce the interest on the loan if interest rates declined
in the country before the loan was fully repaid. At the
end of 3 years, at the time of the third payment, the
bank agreed to reduce the interest rate from 8% to 7%
on the remaining debt. What was the amount of the
equal annual end-of-year payments for each of the first
3 years? And What was the amount of the equal annual
?end-of-year payments for each of the last 3 years
.A
and $627.28 $648.90
.B
and $637.28 $648.90
.C
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