When interest is charged on the unrecovered balance, if you borrow $10,000 at 10% per year interest and repay the loan in equal payments over a 5-year period, the payment amount is $2638 per year. How much will the annual payment be if the interest rate is charged on the initial loan amount instead of the unrecovered balance?
When interest is charged on the unrecovered balance, if you borrow $10,000 at 10% per year interest and repay the loan in equal payments over a 5-year period, the payment amount is $2638 per year. How much will the annual payment be if the interest rate is charged on the initial loan amount instead of the unrecovered balance?
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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When interest is charged on the unrecovered balance, if you borrow $10,000 at 10% per year interest and repay the loan in equal payments over a 5-year period, the payment amount is $2638 per year. How much will the annual payment be if the interest rate is charged on the initial loan amount instead of the unrecovered balance?
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