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You have a loan outstanding. It requires making a payment of $1000 per year for the next three years. Your bank has offered to allow
You have a loan outstanding. It requires making a payment of $1000
per year for the next three years. Your bank has offered to allow you to skip
making the first two payments and instead, to make one large payment at the end of year 3.
If the interest rate on the loan is 5%, what final payment
will the bank require you to make so that it is indifferent between the two forms of payment?
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