What is the amount of the equal annual end-of-year payments

Reference no: EM13698250

An engineer borrowed $3000 from the bank, payable in six equal end-of-year payments at 8%. The bank agreed to reduce the interest on the loan if interest rates declined in the United States before the loan was fully repaid. At the end of three years, at the time of the third payment, the bank agreed to reduce the interest rate from 8% to 7% on the remaining debt (years 4, 5 and 6).

a) Draw a Cash Flow Diagram (neatly – by hand and with a straight edge or use EXCEL): label all items/values, and time increments.

b) What is the amount of the equal annual end-of-year payments for each of the first three years?

c) What is the amount of the equal annual end-of year payments for each of the last three years?

Reference no: EM13698250

Questions Cloud

Consider the two production isoquants in the figure : Fetzer valves can be made in either China or the United States, but because labor in the United States is more skilled, on average, than labor in China, the production technologies differ. Consider the two production isoquants in the figure.

Manufacturing company purchased electrical services : A manufacturing company purchased electrical services for the next 5 years to be paid for with $70,000 now. The service after 5 years will be $15,000 per year beginning with the sixth year. After 2 years service the company, having surplus profits, r..

What is the bond angle and molecular geometry : What is the bond angle and molecular geometry around the middle two carbon atoms of cis-2-butene?

Natural monopoly as number of units produced increases : Identify which of the following statements is always true for a natural monopoly as the number of units produced (output) increases.

What is the amount of the equal annual end-of-year payments : An engineer borrowed $3000 from the bank, payable in six equal end-of-year payments at 8%. The bank agreed to reduce the interest on the loan if interest rates declined in the United States before the loan was fully repaid.

In excel create a cash flow table : You have made arrangements to borrow $1,000 now and another $1,000 three years from now (End of Yr 3). The obligation is to be repaid at the end of four years. If the projected interest rates in years one, two, three, and four are 10%, 12%, 12%, and ..

Calculate the ph before addition of any koh : a) Calculate the pH before addition of any KOH.b) Calculate the pH after the addition of 3.43, 8.59 and 16.17 mL of the base.(Show your work in detail for one of the volumes.)

One of the great upcoming sports in the olympics : One of the great upcoming sports in the Olympics is the sport of curling. Write a brief essay on the uses of momentum collisions in curling. Be sure to discuss the importance of massive stones and of going last.

What is the business problem or opportunity : Business Decision Making Project - What is the Business Problem or Opportunity

User Account

All Pages