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What final payment will the bank require

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Reference no: EM133022310

Problem - You have a loan outstanding. It requires making 5 annual payments at the end of the next 5 years of $6,000 each. Your bank has offered to allow you to skip making the next 4 payments in lieu of making one large payment at the end of the loan's term in 5 years. If the interest rate on the loan is 6.98%, what final payment will the bank require you to make so that it is indifferent between the two forms of payment?

Reference no: EM133022310

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