A loan is repayable by a decreasing annuity payable annually in arrears for 20 years. The repayment at the end of the first year is $6,000 and subsequent repayments reduce by $200 each year. The repayments were calculated using an effective rate of interest of 9% per annum. Calculate the original amount of the loan.

A loan is repayable by a decreasing annuity payable annually in arrears for 20 years. The repayment at the end of the first year is $6,000 and subsequent repayments reduce by $200 each year. The repayments were calculated using an effective rate of interest of 9% per annum. Calculate the original amount of the loan.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 15P

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