A 20-year loan of 1000 is repaid with payments at the end of each year. Each of the first 10 payments = 150% of the amount of interest due. Each of the last 10 payments is X. Find X if the lender charges interest at an annual effective rate of 10%.

A 20-year loan of 1000 is repaid with payments at the end of each year. Each of the first 10 payments = 150% of the amount of interest due. Each of the last 10 payments is X. Find X if the lender charges interest at an annual effective rate of 10%.

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter7: Using Consumer Loans

Section: Chapter Questions

Problem 6FPE

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Question

A 20-year loan of 1000 is repaid with payments at the end of each year. Each of the first 10
payments = 150% of the amount of interest due. Each of the last 10 payments is X. Find X if the
lender charges interest at an annual effective rate of 10%.

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