Problem 2:Sarah borrowed $120,000 at an interest rate of 9%. Repayment of the loan will beon six years in installments according to the following table:End of year1234. (F/P, 9%, 6) = 1.6771. (F/A, 9%, 6) = 7.523356Cash flow (for theinstallments only)$20,000$20,000$10,000$20,000$20,000$XDraw a chash flow diagram and find the size of the last payment (X) to pay off theloan.You may need the following to solve the problem:. (F/P, 9%, 3) = 1.295

Here,Loan Amount is $120,000Payment Cash Flows are as follows:…

Sarah borrowed $120,000 at an interest rate of 9%. Repayment of the loan will be on six years in installments according to the following table: End of year 1 2 3 4 5 6 Cash flow (for the installments only) $20,000 $20,000 $10,000 $20,000 $20,000 $X Draw a chash flow diagram and find the size of the last payment (X) to pay off the loan.

Sarah borrowed $120,000 at an interest rate of 9%. Repayment of the loan will be on six years in installments according to the following table: End of year 1 2 3 4 5 6 Cash flow (for the installments only) $20,000 $20,000 $10,000 $20,000 $20,000 $X Draw a chash flow diagram and find the size of the last payment (X) to pay off the loan.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 17P

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