You have a loan outstanding. It requires making six annual payments at the end of the next

Question:

You have a loan outstanding. It requires making six annual payments at the end of the next six years of $9000 each. Your bank has offered to restructure the loan so that instead of making the six payments as originally agreed, you will make only one final payment at the end of the loan in six years. If the interest rate on the loan is 9.85%, what final payment will the bank require you to make so that it is indifferent between the two forms of payment?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Corporate Finance

ISBN: 9781292446318

6th Global Edition

Authors: Jonathan Berk, Peter DeMarzo

Question Posted: