Question: A borrows 1000 from B and agrees to pay it in 8 equal installments at 18% effective, with the first payment due in one year.

A borrows 1000 from B and agrees to pay it in 8 equal installments at 18% effective, with the first payment due in one year. After 3 payments B sells her right to future payments to C at a price that yields C 19% effective.
a. Find the price which C pays to B and overall yield rate to B.
b. Find the overall yield rate to C.

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To solve this problem we need to follow these steps Part a 1 Find the Installment Payment The loan is repaid in 8 equal installments with an 18 effect... View full answer

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