My brother wants to pay back the loan differently He pays meback $5,000 at the e

Question

My brother wants to pay back the loan differently He pays meback $5,000 at the end of year three. He wants to decrease thisannual payment by 250 per year through year 8. At 10% interest whatis the present value of this investment.

14,890

15995

17,996

21,776

My brother wants to pay back the loan differently He pays meback $5,000 at the end of year three. He wants to decrease thisannual payment by 250 per year through year 8. At 10% interest whatis the present value of this investment.

14,890

15995

17,996

21,776

Explanation / Answer

Year

Payment Amount

Present Value Factor at 10%

Present Values

0.751315

0.683013

0.620921

0.564474

0.513158

0.466506

Year

Payment Amount

Present Value Factor at 10%

Present Values

3 $5,000

0.751315

$3,756.00 4 $4,750

0.683013

$3,244.31 5 $4,500

0.620921

$2,794.14 6 $4,250

0.564474

$2,399.01 7 $4,000

0.513158

$2,052.63 8 $3,750

0.466506

$1,749.40 Present Value of theInvestment $15,995.49

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.