$100,000 at 10% per year interest. What loan in 7 years? Draw the cash flow diag
ID: 2810901 • Letter: #
Question
$100,000 at 10% per year interest. What loan in 7 years? Draw the cash flow diagram. would be the loan payment each year if the graduate plans to pay off the a. (4+1 pts) b. The graduate changes his mind and decides to pay off his loan aggressively. So $25,045 per year (instead of the amount calculate above (in problem 2a)) for 5 years only for the same loan amount of $100,000 he has borrowed. What would be the interest rate that he would then be paying he plans to pay an amount of Draw the cash flow diagram. (4+1 pts)Explanation / Answer
PV = 100,000, FV = 0, rate = 10%, N = 7
use PMT funciton in Excel
annual payments = 20,540.55
b.
PV = 100,000, FV = 0, PMT = -25,045, N = 7
use rate funciton in Excel
rate of interest = 16.39%
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