Question

You owe your parents $14,000 (in present day dollars) and want to repay them in equal amounts the first to occur in 3 years from today and the other in 8 years from today. If the interest rate is 12.3% per annum compounding monthly, what will be the amount of each repayment?

Answer 1

Present Value of amount = $14,000

Interest rate = 12.3% compounded monthly

Calculating the Equal repayments:-

n = no of year of that repayment

m = no of times compounding

CF = $ 13,103.52

So, the amount of each repayment is $ 13,103.52

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