In 8 years, Lang Company will have to repay a $90,000 loan. Assume a 4% interest rate compounded quarterly. How much must Lang Company pay each period to have $90,000 at the end of 8 years?
In 8 years, Lang Company will have to repay a $90,000 loan. Assume a 4% interest rate compounded quarterly. How much must Lang Company pay each period to have $90,000 at the end of 8 years?
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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In 8 years, Lang Company will have to repay a $90,000 loan. Assume a 4% interest rate compounded quarterly. How much must Lang Company pay each period to have $90,000 at the end of 8 years?
Expert Solution
Step 1
Loan to repay "FV" = $90,000
Number of years to repay = 8
Number of periods to repay "n"= 8*4 = 32
Annual interest rate = 4%
Quarterly rate "r" = 4%/4 = 1%
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