UECM 1403 Theory of Interest 3. A borrower repays a loan by making annual payments to payment is made at the beginning of each year with the first pn Calculate the presen subsequent payment increases by 6% from value of the pay Solution: the lender for 10 years. The ment being S 100. Each the previous payment arks) ments using the nominal rate of 8% convertible semiannually. (5 m