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Today (t = 0) you borrow $6,000 from a bank and agree to repay the loan in five (5) equal annual payments. The first payment
Today (t = 0) you borrow $6,000 from a bank and agree to repay the loan in five (5) equal annual
payments. The first payment will be made next year (t = 1). The interest rate is 7.5% APR.
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What is your annual payment?
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Now suppose that you make the first payment on the loan immediately (t = 0) instead of
the next year. What is your annual payment?
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