(1) What is the present value of the money being borrowed? (2) Convert your Present Value to Annual Payment. Answer: ieff (show in four decimal) = P0Total = A/P0Total =
(1) What is the present value of the money being borrowed? (2) Convert your Present Value to Annual Payment. Answer: ieff (show in four decimal) = P0Total = A/P0Total =
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 14P
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Question
An entrepreneur needs thousand of dollars to launch the global expansion of his software business. I have agreed to lend him the money today (n=0) at an interest rate of 8% compounded quarterly. I required that the loan be repaid in eight annual payments starting at Year 3 with a $10K payment. Subsequent payments will decrease by $1K each year thereafter. (1) What is the present value of the money being borrowed? (2) Convert your Present Value to Annual Payment.
Answer:
ieff (show in four decimal) =
P0Total =
A/P0Total =
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