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Today (i.e., EOY 0), Ty Segall took out a loan to purchase a tour van in support of his recent album Manipulator. He pays back the loan in 10 equal, end-of-year payments (EOY 1, 2, ... , 10) of $5,000. The bank charges 8% interest.
a. Draw the cash-flow diagram (from Ty's perspective!).
b. What was the price of the tour van? (Assume cost of van= loan principal.)
c. If he instead purchased a tour van costing $35,000, what size payment would be made in each of the 10 years?
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