Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / Helen borrows $20000 to be repaid over 15 years with level annual payments with an annual ...

Helen borrows $20000 to be repaid over 15 years with level annual payments with an annual effective interest rate of 8 The first payment is due one year after she takes out the loan

Helen borrows $20,000 to be repaid over 15 years with level annual payments with an annual effective interest rate of 8%. The first payment is due one year after she takes out the loan. Helen pays an additional $4,000 at the end of year 9 (in addition to her normal payment). At that time (the end of year 9) she negotiates to pay off the remaining principal at the end of year 14 with a sinking fund. The sinking fund accumulates at an annual effective interest rate of 7%. Helen will make level annual payments. Helen will also make annual interest payments at an annual effective interest rate of 10%. You may assume all payments are made at the end of the year. Determine Helen’s total annual outlay starting with year 10.

 

Apr 04 2020 View more View Less

Answer (Solved)

question Subscribe To Get Solution

Related Questions