Assume you borrow $10,000 today and promise to repay the loan in two payments, one in year 2 and the other in year 4, with the one in year 4 being only half as large as the one in year 2. At an interest rate of 10% per year, the size of the payment in year 4 is closest to: (a) $4280 (b) $3975 (c) $3850 (d) $3690
Assume you borrow $10,000 today and promise to repay the loan in two payments, one in year 2 and the other in year 4, with the one in year 4 being only half as large as the one in year 2. At an interest rate of 10% per year, the size of the payment in year 4 is closest to: (a) $4280 (b) $3975 (c) $3850 (d) $3690
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 14P
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Question
Assume you borrow $10,000 today and promise to
repay the loan in two payments, one in year 2 and
the other in year 4, with the one in year 4 being
only half as large as the one in year 2. At an interest
rate of 10% per year, the size of the payment in
year 4 is closest to:
(a) $4280 (b) $3975
(c) $3850 (d) $3690
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