$120,000 1 3 4 5 $10,000 $20,000 $20,000 $20,000 $20,000 $X

Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter20: The Problem Of Adverse Selection Moral Hazard
Section: Chapter Questions
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A company borrowed $120,000 at an interest rate of 9% to be repaid over a period of six years. The loan will be repaid in installments according to the cash-flow diagram shown herewith (which also reflects the cash inflow of $120,000). What is the size of the last payment (X) required to pay off the loan?

$120,000
1
3
4
5
$10,000
$20,000 $20,000
$20,000 $20,000
$X
Transcribed Image Text:$120,000 1 3 4 5 $10,000 $20,000 $20,000 $20,000 $20,000 $X
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