Given: P = $21,061.82, i = 6% per year, and = 5 years. %3D Find: A. A P = $21,061.82 i = 6% Years 1 2 3 4 A A A Figure 2.20 Cash flow diagram A A
Given: P = $21,061.82, i = 6% per year, and = 5 years. %3D Find: A. A P = $21,061.82 i = 6% Years 1 2 3 4 A A A Figure 2.20 Cash flow diagram A A
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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Question
You borrowed $21,061.82 to finance the educational expenses for your senior year of college. The loan will be paid off over five years. The loan carries an interest rate of 6% per year and is to be repaid in equal annual installments over the next five years. Assume that the money was borrowed at the beginning of your senior year and that the first installment will be due a year later. Compute the amount of the annual installments (Figure 2.20).
Transcribed Image Text:Given: P = $21,061.82, i = 6% per year, and = 5 years.
%3D
Find: A.
A P = $21,061.82
i = 6%
Years
1 2 3
4
A A A
Figure 2.20 Cash flow diagram
A A
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