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A student borrowed $10,000.00 in student loan from a bank that charges 10% interest rate annually. The student decides to pay the bank $1,000.00 every
A student borrowed $10,000.00 in student loan from a bank that charges 10% interest rate annually. The student decides to pay the bank $1,000.00 every year for four years. (a) At the end of year 5, how much does the student still owes the bank to pay off the student loan? (b) If the student decides to pay off the loan in 5 years, how much does the student needs to pay the bank every year for 5 years? (c) If the student pays every year only the interest due at the end of each year for 4 years, how much does the student has to pay at the end of year 5 ? NOTE: Draw the cash flow diagrams for each of (a), (b), and (c) above. A student borrowed $10,000.00 in student loan from a bank that charges 10% interest rate annually. The student decides to pay the bank $1,000.00 every year for four years. (a) At the end of year 5, how much does the student still owes the bank to pay off the student loan? (b) If the student decides to pay off the loan in 5 years, how much does the student needs to pay the bank every year for 5 years? (c) If the student pays every year only the interest due at the end of each year for 4 years, how much does the student has to pay at the end of year 5 ? NOTE: Draw the cash flow diagrams for each of (a), (b), and (c) above
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