LOAN CONSOLIDATION The proprietors of The Coachmen Inn secured two loans from Union Bank: one for $ 8000 due in 3 years and one for $ 15 , 000 due in 6 years , both at an interest rate of 8 % /year compounded semiannually. The bank has agreed to allow the two loans to be consolidated into one loan payable in 5 years at the same interest rate. What amount will the proprietors of the inn be required to pay the bank at the end of 5 years ? Hint: Find the present value of the first two loans.
LOAN CONSOLIDATION The proprietors of The Coachmen Inn secured two loans from Union Bank: one for $ 8000 due in 3 years and one for $ 15 , 000 due in 6 years , both at an interest rate of 8 % /year compounded semiannually. The bank has agreed to allow the two loans to be consolidated into one loan payable in 5 years at the same interest rate. What amount will the proprietors of the inn be required to pay the bank at the end of 5 years ? Hint: Find the present value of the first two loans.
Solution Summary: The author calculates the amount the proprietors of the inn be required to pay the bank at the end of 5years.
LOAN CONSOLIDATION The proprietors of The Coachmen Inn secured two loans from Union Bank: one for
$
8000
due in
3
years
and one for
$
15
,
000
due in
6
years
, both at an interest rate of
8
%
/year
compounded semiannually. The bank has agreed to allow the two loans to be consolidated into one loan payable in
5
years
at the same interest rate. What amount will the proprietors of the inn be required to pay the bank at the end of
5
years
? Hint: Find the present value of the first two loans.
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