A company took decreasing amounts of loans for the first five years of its forma

Question

A company took decreasing amounts of loans for the first five years of its formation, as follows: 500K, 400K, 300K, 200K, 100K. In the subsequent years, it’s operation started becoming successful, and it started to pay back, at the end of each successive year, amounts of 100K, 200K, 300K, 400K, 500K.
Assuming a constant interest rate of 5% being charged for the entire period, how much does the company still owe at the end of the final payment of 500K? Please show the cash flow diagram. A company took decreasing amounts of loans for the first five years of its formation, as follows: 500K, 400K, 300K, 200K, 100K. In the subsequent years, it’s operation started becoming successful, and it started to pay back, at the end of each successive year, amounts of 100K, 200K, 300K, 400K, 500K.
Assuming a constant interest rate of 5% being charged for the entire period, how much does the company still owe at the end of the final payment of 500K? Please show the cash flow diagram.
Assuming a constant interest rate of 5% being charged for the entire period, how much does the company still owe at the end of the final payment of 500K? Please show the cash flow diagram.

Explanation / Answer

Year Principal Taken/Repaid Loan Before Interest Interest Total loan 1 500 500 25 525 2 400 925 46.25 971.25 3 300 1271.25 63.5625 1334.8125 4 200 1534.8125 76.74063 1611.55313 5 100 1711.553125 85.57766 1797.13078 6 -100 1797.130781 89.85654 1786.98732 7 -200 1786.98732 89.34937 1676.33669 8 -300 1676.336686 83.81683 1460.15352 9 -400 1460.153521 73.00768 1133.1612 10 -500 1133.161197 56.65806 689.819257

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