Asked by Briana Goins on Jul 15, 2024
Verified
A loan of $10,000 is to be repaid by three payments of $2,500 due in two, four, and six months, and a fourth payment due in eight months. What should be the size of the fourth payment if an interest rate of 11% is charged on the loan? Use today as the focal date.
Interest Rate
The portion of borrowed funds or capital utilized that incurs a cost, traditionally mentioned as a percentage for each year.
Loan
A financial agreement where a lender provides funds to a borrower, who agrees to repay the amount with additional interest over a defined period.
Repaid
The act of paying back money that was borrowed.
- Utilize the principle of equivalent value to evaluate varying payment options.
- Determine unidentified payments or values in intricate loan and investment situations.
Verified Answer
JD
Learning Objectives
- Utilize the principle of equivalent value to evaluate varying payment options.
- Determine unidentified payments or values in intricate loan and investment situations.