You have a loan outstanding. It requires making twelve annual payments at the end of the next twelve years of $6,000 each (t-1 to t-12). Your bank has offered to restructure the loan so that instead of making twelve payments as originally agreed, you will make only a one-time payment in twenty years (t-20). If the interest rate on the loan is 6%, what one-time payment will the bank require you to make so that it is indifferent between the two forms of payment? Select one alternative: O $161,328.74 O $100,001.13 O $225.478.56
You have a loan outstanding. It requires making twelve annual payments at the end of the next twelve years of $6,000 each (t-1 to t-12). Your bank has offered to restructure the loan so that instead of making twelve payments as originally agreed, you will make only a one-time payment in twenty years (t-20). If the interest rate on the loan is 6%, what one-time payment will the bank require you to make so that it is indifferent between the two forms of payment? Select one alternative: O $161,328.74 O $100,001.13 O $225.478.56
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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You have a loan outstanding. It requires making twelve annual payments at the end of the next twelve years of
$6,000 each (t=1 to t-12). Your bank has offered to restructure the loan so that instead of making twelve
payments as originally agreed, you will make only a one-time payment in twenty years (t-20). If the interest rate
on the loan is 6%, what one-time payment will the bank require you to make so that it is indifferent between the
two forms of payment?
Select one alternative:
O $161,328.74
O $100,001.13
$225,478.56
O $50,303.06
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