Question
Ten years ago Jim took a mortgage loan of $200,000 to be repaid in 20 equal annual installments of $30,197.34.The bank has told him that
Ten years ago Jim took a mortgage loan of $200,000 to be repaid in 20 equal annual installments of $30,197.34.The bank has told him that they would accept $145,000 today as payment in full for the remainder of the loan.What is the balance on this loan? If we assume that Jim has the money, what interest rate must he earn on alternative investments in order not to accept the bank offer?
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Essentials of Managerial Finance
Authors: Scott Besley, Eugene F. Brigham
14th edition
324422709, 324422702, 978-0324422702
