Jack has borrowed $1,000,000 from MQ Bank for 10 years at an interest rate of j₂ =4.49%. He will make 10 annual repayments. According to the loan agreement, Jack's repayments will be $89,000 for the first two years followed by payments of with the amount of X per year for the remaining eight years. This loan needs to be fully repaid by the end of 10 years. (a) Assume that all annual repayments will be paid at the end of each year (the first payment will be at the end of the first year), what is the value of Jacks' annual payment amount X (rounded to four decimal places)? a. 126286.0504 b. 138318.4222 c. 137881.1317 d. 126564.4421 *
Jack has borrowed $1,000,000 from MQ Bank for 10 years at an interest rate of j₂ =4.49%. He will make 10 annual repayments. According to the loan agreement, Jack's repayments will be $89,000 for the first two years followed by payments of with the amount of X per year for the remaining eight years. This loan needs to be fully repaid by the end of 10 years. (a) Assume that all annual repayments will be paid at the end of each year (the first payment will be at the end of the first year), what is the value of Jacks' annual payment amount X (rounded to four decimal places)? a. 126286.0504 b. 138318.4222 c. 137881.1317 d. 126564.4421 *
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
Problem 1PS
Related questions
Question
None
Transcribed Image Text:Jack has borrowed $1,000,000 from MQ Bank for 10 years at an interest rate of j₂ =4.49%. He will make 10 annual repayments. According to the loan agreement, Jack's repayments will be
$89,000 for the first two years followed by payments of with the amount of X per year for the remaining eight years. This loan needs to be fully repaid by the end of 10 years.
(a) Assume that all annual repayments will be paid at the end of each year (the first payment will be at the end of the first year), what is the value of Jacks' annual payment amount X
(rounded to four decimal places)?
a. 126286.0504
b. 138318.4222
c. 137881.1317
d. 126564.4421 *
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education