You have a loan outstanding. It requires making eight annual payments of $3,000 each at the end of the next eight years. Your bank has offered to allow you to skip making the next seven payments in lieu of making one large payment at the end of the loan's term in eight years. If the interest rate on the loan is 9%, what final payment will the bank require you to make so that it is indifferent to the two forms of payment? The final payment the bank will require you to make is $ (Round to the nearest dollar) CO

You have a loan outstanding. It requires making eight annual payments of $3,000 each at the end of the next eight years. Your bank has offered to allow you to skip making the next seven payments in lieu of making one large payment at the end of the loan's term in eight years. If the interest rate on the loan is 9%, what final payment will the bank require you to make so that it is indifferent to the two forms of payment? The final payment the bank will require you to make is $ (Round to the nearest dollar) CO

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 15P

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You have a loan outstanding. It requires making nine annual payments of $7,000 each at the end of the next nine years. Your bank has offered to allow you to skip making the next eight payments in lieu of making one large payment at the end of the loan's term in nine years. If the interest rate on the loan is 8%, what final payment will the bank require you to make so that it is indifferent to the two forms of payment?
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