Andrea borrowed P75,000 at 13% compounded annually which she will repay in five years. If each successive payment is P5,000 less than the previous payment, how much will be her first and last payment? Pls draw the cash flow diagram

Andrea borrowed P75,000 at 13% compounded annually which she will repay in five years. If each successive payment is P5,000 less than the previous payment, how much will be her first and last payment? Pls draw the cash flow diagram

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

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Pls draw the cash flow diagram

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