What is the size of eight equal annual payments to repay a loan of $1,000? The first payment is due one year after receiving the loan? The interest rate is 10% per year. Hint (at_Page 21) The constant amount or payment (PMT) per interest period is calculated using the formula: PV(RATE(1+RATE)NPER (1+ RATE)NPER – 1 PMT = RATE = effective interest rate per interest period = number of compounding (interest) periods = present value or principle or initial amount at the start NPER PV

What is the size of eight equal annual payments to repay a loan of $1,000? The first payment is due one year after receiving the loan? The interest rate is 10% per year. Hint (at_Page 21) The constant amount or payment (PMT) per interest period is calculated using the formula: PV(RATE(1+RATE)NPER (1+ RATE)NPER – 1 PMT = RATE = effective interest rate per interest period = number of compounding (interest) periods = present value or principle or initial amount at the start NPER PV

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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