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Draw Cash flow diagrams Set up and solve problem in Excel If a person borrows $8000 from her bank at an interest rate of 12%

Draw Cash flow diagrams

Set up and solve problem in Excel

If a person borrows $8000 from her bank at an interest rate of 12% per year for three years, how much must she repay at that time (end of year 3) if:

a) the interest is compounded annually

b) the interest is compounded quarterly

Suppose the bank wanted three equal repayments at the end of each year; Assume interest is compounded annually. What would the repayment amounts be?

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To visualize the cash flow diagrams for the given scenarios we can represent the cash inflows and outflows on a timeline a If the interest is compound... blur-text-image

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