Ian loaned his friend $20,000 to start a new business. He considers this loan to be...
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Ian loaned his friend $20,000 to start a new business. He considers this loan to be an investment, and therefore requires his friend to pay him an interest rate of 7% on the loan. He also expects his friend to pay back the loan over the next four years by making annual payments at the end of each year. Ian texted and asked that you help him calculate the annual payments that he should expect to receive so that he can recover his initial investment and earn the agreed-upon 7% on his investment. Calculate the annual payment and complete the following capital recovery schedule: Year Beginning Amount 1 2 3 4 $20,000.00 Payment Interest Paid Principal Paid Ending Balance 50.01 Ian loaned his friend $20,000 to start a new business. He considers this loan to be an investment, and therefore requires his friend to pay him an interest rate of 7% on the loan. He also expects his friend to pay back the loan over the next four years by making annual payments at the end of each year. Ian texted and asked that you help him calculate the annual payments that he should expect to receive so that he can recover his initial investment and earn the agreed-upon 7% on his investment. Calculate the annual payment and complete the following capital recovery schedule: Year Beginning Amount 1 2 3 4 $20,000.00 Payment Interest Paid Principal Paid Ending Balance 50.01
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Related Book For
Introduction To Corporate Finance
ISBN: 9781118300763
3rd Edition
Authors: Laurence Booth, Sean Cleary
Posted Date:
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