Number of payments. Tony is offering two repayment plans to Phil for a long overdue loan. Offer 1 is to receive a visit from an enforcer and the debt is due in full at once. Offer 2 is to pay back $4,200 at the end of the year at an interest rate of 16% until Phil pays off the loan principal. Phil owes Tony $16.000. How long will it take for Phil to pay off the loan if he takes offer 2? How long will it take for Phil to pay off the loan if he takes offer 2?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 41P
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Number of payments. Tony is offering two repayment plans to Phil for a long overdue loan. Offer 1 is to receive a
visit from an enforcer and the debt is due in full at once. Offer 2 is to pay back $4,200 at the end of the year at an
interest rate of 16% until Phil pays off the loan principal. Phil owes Tony $16.000. How long will it take for Phil to pay
off the loan if he takes offer 2?
How long will it take for Phil to pay off the loan if he takes offer 2?
 
 ( explain all point of answer with proper answer ).

 
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