A loan is being repaid by 15 annual instllments of 1000 each. Interest is at an effec- ive annual rate of 5%. Immediately after the fifth installment is paid, the loan is renegotiated. The revised amortization schedule calls for a sixth installment of 800, a seventh installment of 300 + K, with each subsequent installment increasing by K over the previous payment. The beriod of the loan is not changed. Determine the revised amount of the last installment.

A loan is being repaid by 15 annual instllments of 1000 each. Interest is at an effec- ive annual rate of 5%. Immediately after the fifth installment is paid, the loan is renegotiated. The revised amortization schedule calls for a sixth installment of 800, a seventh installment of 300 + K, with each subsequent installment increasing by K over the previous payment. The beriod of the loan is not changed. Determine the revised amount of the last installment.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 12P

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