Asked by Briana Goins on Jul 15, 2024
Verified
A loan of $10,000 is to be repaid by three payments of $2,500 due in two, four, and six months, and a fourth payment due in eight months. What should be the size of the fourth payment if an interest rate of 11% is charged on the loan? Use today as the focal date.
Repaid
The act of paying back money that was borrowed.
Interest Rate
The portion of borrowed funds or capital utilized that incurs a cost, traditionally mentioned as a percentage for each year.
Loan
A financial agreement where a lender provides funds to a borrower, who agrees to repay the amount with additional interest over a defined period.
- Utilize the principle of equivalent value to evaluate varying payment options.
- Determine unidentified payments or values in intricate loan and investment situations.
Verified Answer
JD
Learning Objectives
- Utilize the principle of equivalent value to evaluate varying payment options.
- Determine unidentified payments or values in intricate loan and investment situations.