Please solve using the Uniform Arithmetic Gradient formula. Find the equivalent annual payment of the following obligations at 20% interest rate. End of Year Payment 1 P 8,000 2 P 7,000 3 P 6,000 4 P 5,000

Please solve using the Uniform Arithmetic Gradient formula. Find the equivalent annual payment of the following obligations at 20% interest rate. End of Year Payment 1 P 8,000 2 P 7,000 3 P 6,000 4 P 5,000

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

Question

Please solve using the Uniform Arithmetic Gradient formula.

Find the equivalent annual payment of the following obligations at 20% interest rate.

End of Year Payment

1 P 8,000

2 P 7,000

3 P 6,000

4 P 5,000

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