Calculate the required annual payment

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Reference no: EM131299831

Solving for unknowns Lowlife Company defaulted on a $250,000 loan that was due on December 31, 2016. The bank has agreed to allow Lowlife to repay the $250,000 by making a series of equal annual payments beginning on December 31, 2017.

Required:

1. Calculate the required annual payment if the bank's interest rate is 10% and four payments are to be made.

2. Calculate the required annual payment if the bank's interest rate is 8% and five payments are to be made.

3. If the bank's interest rate is 10%, how many annual payments of $51,351 would be required to repay the debt?

4. If three payments of $104,087 are to be made, what interest rate is the bank charging Lowlife?

Reference no: EM131299831

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