Negotiations to make seven-year loan

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Reference no: EM131844535

You are in negotiations to make a 7-year loan of $25,000 to DeVille Corporation. To repay you, DeVille will pay $2,500 at the end of Year 1, $5,000 at the end of Year 2, and $7,500 at the end of Year 3, plus a fixed but currently unspecified cash flow, X, at the end of each year from Year 4 through Year 7. You are confident the payments will be made, since DeVille is essentially riskless. You regard 8% as an appropriate rate of return on a low risk but illiquid 7-year loan. What cash flow must the investment provide at the end of each of the final 4 years, that is, what is X?

Could you please show how you would do it on a financial calculator? Please step to step instructions thanks

a. $4,271.67

b. $4,496.49

c. $4,733.15

d. $4,969.81

e. $5,218.30

Reference no: EM131844535

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