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Then answer the following questions:
1. Suppose you borrow $50,000 now at 16% interest compounded annually. The borrowed amount plus interest will be repaid in a lump sum at the end of 6 years. How much must be repaid? Use Table 9A-1 and the basic equation FV = Present amount × Future value factor.
2. Repeat requirement 1 using Table 9A-2 and the basic equation PV = Future amount × Present value factor.
3. Assume the same facts as in requirement 1, except that the loan will be repaid in equal installments at the end of each of 5 years. How much must be repaid each year? Use Table 9A-3 and the basic equation PV A = Future annual amounts × Conversion factor.



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  • CreatedFebruary 20, 2015
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