(a) 200,000 USD is borrowed at a rate of 15% interest per year com- pounded continuously. If 5,000 USD is paid per month for the first two years, after which time 2,000 USD per month is paid, when will the debt be cleared? Use the continuous approximation for the payments. (House mortgages keep separate buckets for interest and principle. Here we are assuming one bucket which is principle added with interest.)

(a) 200,000 USD is borrowed at a rate of 15% interest per year com- pounded continuously. If 5,000 USD is paid per month for the first two years, after which time 2,000 USD per month is paid, when will the debt be cleared? Use the continuous approximation for the payments. (House mortgages keep separate buckets for interest and principle. Here we are assuming one bucket which is principle added with interest.)

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 8EB: You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how...

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