Compute the amount of the 6th payment

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Reference no: EM131970879

A loan of $50,000 at the effective rate of interest of 8% is to be paid off completely by annual payments at the end of each of the next 20 years.

However each of first 5 equal payments will be only 90% of each of the last 15 equal payments.

a) Compute the amount of the 6^th payment;

b) Compute the amount of principal in the 6^th payment.

Reference no: EM131970879

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