In recent years, the United States has gone from being a “positive savings” notion to a “negative savings” notion (i.e. Americans spend more money than they earn). Suppose a typical American household spends $10,000 more than it makes and it does this for eight consecutive years. If this debt will be financed at an interest rate of 15% per year, what annual repayment will be required to repay the debt over a 10 year period (repayments will start at EOY 9)?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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In recent years, the United States has gone from being a “positive savings” notion to a “negative savings” notion (i.e. Americans spend more money than they earn). Suppose a typical American household spends $10,000 more than it makes and it does this for eight consecutive years. If this debt will be financed at an interest rate of 15% per year, what annual repayment will be required to repay the debt over a 10 year period (repayments will start at EOY 9)? 

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