You borrow $10,000 today with interest rate 7%, and you plan to pay the bank bac
ID: 2724264 • Letter: Y
Question
You borrow $10,000 today with interest rate 7%, and you plan to pay the bank back with 8 equal annual payment. Let us assume the first payment happen at the end of each year.
2(a) how much is the annual payment?
b) You borrow $10,000 today with interest rate 7%, and you plan to pay the bank back with 8 equal annual payment - How much is the interest payment for year 3?
c) You borrow $10,000 today with the interest rate 7%, and you plan to pay the bank back with 8 equal annual payments. - How much is the balance of the principle at the end of year 8?
2(a) how much is the annual payment?
Principal beg. Payment Yearyear end year Interest Principal 2 3 4 6 7 8Explanation / Answer
The Annual payment =$ 1674.68
b) interest payment for 3 years = $ 1890.54
c) the principle amount at the end of 8 th year = 0
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