Land is purchased for $75,000. It is agreed for the land to be paid for over a 5-year period with annual payments and using a 12% annual compound interest rate. Each payment is to be $3,000 more than the previous payment. Determine the size of the last payment.

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
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9

Solve Problem 02.05-PR027 for the
case in which each successive
payment is to be 12% greater than the
previous payment
Land is purchased for $75,000. It is
agreed for the land to be paid for over
a 5-year period with annual payments
and using a 12% annual compound
interest rate. Each payment is to be
$3,000 more than the previous
payment. Determine the size of the
last payment.
Transcribed Image Text:Solve Problem 02.05-PR027 for the case in which each successive payment is to be 12% greater than the previous payment Land is purchased for $75,000. It is agreed for the land to be paid for over a 5-year period with annual payments and using a 12% annual compound interest rate. Each payment is to be $3,000 more than the previous payment. Determine the size of the last payment.
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