For a principal borrowed under %14 nominal interest rate, compounded annually, a bank offers two alternative payment plans in gradient series with 35 years of payment horizon. • Base payment of $1000 at the end of the first year, and at the end of every next year, the payment size will be increased by $25 compared to the previous year. • Base payment of $800 at the end of the first year, and at the end of every next year, the payment size will be increased by a constant $x compared to the previous year, What is x? Choose the closest value to your answer. A $53.02 B $51.99 $54.49 $52.68 (E) $53.63
For a principal borrowed under %14 nominal interest rate, compounded annually, a bank offers two alternative payment plans in gradient series with 35 years of payment horizon. • Base payment of $1000 at the end of the first year, and at the end of every next year, the payment size will be increased by $25 compared to the previous year. • Base payment of $800 at the end of the first year, and at the end of every next year, the payment size will be increased by a constant $x compared to the previous year, What is x? Choose the closest value to your answer. A $53.02 B $51.99 $54.49 $52.68 (E) $53.63
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
![For a principal borrowed under %14 nominal interest rate, compounded annually, a bank offers two alternative payment plans in
gradient series with 35 years of payment horizon.
• Base payment of $1000 at the end of the first year, and at the end of every next year, the payment size will be increased by
$25 compared to the previous year.
• Base payment of $800 at the end of the first year, and at the end of every next year, the payment size will be increased by a
constant $x compared to the previous year.
What is x? Choose the closest value to your answer.
$53.02
B) $51.99
$54.49
$52.68
E) $53.63](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F812ccd47-45b4-4a83-957d-515b3a03e0f2%2Fcf6354b5-71ee-479e-9c1b-7505c96c1331%2F2nrvccm_processed.jpeg&w=3840&q=75)
Transcribed Image Text:For a principal borrowed under %14 nominal interest rate, compounded annually, a bank offers two alternative payment plans in
gradient series with 35 years of payment horizon.
• Base payment of $1000 at the end of the first year, and at the end of every next year, the payment size will be increased by
$25 compared to the previous year.
• Base payment of $800 at the end of the first year, and at the end of every next year, the payment size will be increased by a
constant $x compared to the previous year.
What is x? Choose the closest value to your answer.
$53.02
B) $51.99
$54.49
$52.68
E) $53.63
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