How to have the necessary funds to pay off the loan

Reference no: EM13200993

You borrowed $20,000 from your uncle to finance your college education. Your uncle is very flexible in your repayment plan, but he will charge an 8% interest compounded annually for any unpaid balance. Suppose your payment plan is as follows:

Payment 1: $5,000 two years from now
Payment 2: $7,000 three years from now
Payment 3: $X five years from now

How much money do you need to come up with in year 5 (payment 3) to ensure you have the necessary funds to pay off the loan?

Reference no: EM13200993

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