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You have an outstanding loan that requires you to make four annual payments of $ 8 , 0 0 0 , with payments due at
You have an outstanding loan that requires you to make four annual payments of $ with payments due at the end of each of the next four years. The government has ordered a temporary closure of your business because of a global pandemic and you are not able to make the loan payments as promised. Instead of making annual payments, you negotiate with your bank to repay the loan in one lump sum four years from today. If the loan has an interest rate of what single payment four years from today will the bank require in order to be indifferent between making the annual payments and making one lump sum payment four years from today?
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