2. A loan is being repaid with 20 annual payments of P1,000 at the end of each year. Atter the tenth payment, the borrower wishes to pay the balance with 10 semi-annual payments of X paid at the end of each half-year. If the nominal rate of interest convertible semiannually is 10%, solve for X.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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1.
A loan is being repaid with 20 payments of 1500 at the end of each year. Interest
is calculated at an annual effective rate of 5% for the first 10 years and 4% thereafter.
Find the OLB immediately after five payments have been made by both the prospective
and the retrospective method.
2.
A loan is being repaid with 20 annual payments of P1,000 at the end of each year.
Atter the tenth payment, the borrower wishes to pay the balance with 10 semi-annual
payments of X paid at the end of each half-year. If the nominal rate of interest convertible
semiannually is 10%, solve for X.
Transcribed Image Text:1. A loan is being repaid with 20 payments of 1500 at the end of each year. Interest is calculated at an annual effective rate of 5% for the first 10 years and 4% thereafter. Find the OLB immediately after five payments have been made by both the prospective and the retrospective method. 2. A loan is being repaid with 20 annual payments of P1,000 at the end of each year. Atter the tenth payment, the borrower wishes to pay the balance with 10 semi-annual payments of X paid at the end of each half-year. If the nominal rate of interest convertible semiannually is 10%, solve for X.
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