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Kaelyn borrows $40,000 from her grandfather today to cover her college expenses. She agrees to repay the loan, with the first payment due 5 years
Kaelyn borrows $40,000 from her grandfather today to cover her college expenses. She agrees to repay the loan, with the first payment due 5 years from today in the amount of $2,000. No payment is made at the end of year 6. Starting 7 years from today, a series of five annual end-of-year payments is made, with the first in the amount of $4,400. Each subsequent payment is $1,600 greater than the previous payment. Draw the cash flow diagram of this transaction from the grandfather's perspective. The cash flow diagram can be first represented by end of year cash flows, Aj, for years, j = 0,1,2,...11. List the cash flows from the grandfather's perspective. Ao = $ A1 = $ A2 = $L A3 = $ A4 = $L A5 = $ A6 = $ Az = $L Ag = $ Ag = $L A10 = $L A11 = $
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