Answer to Question #263026 in Macroeconomics for Blee

Question

Suppose that one has a present loan of $1,000 and desires to determine what equivalent uniform EOY payments, A, could be obtained from it for 15 years if the nominal interest rate is 14.2% compounded continuously (M =∞).

Answer 1

$= \$1000 (P/F, 4.9\%, 20) + \$1000x0.03(P/A, 4.9\%, 20)\\ = 384.1 + 377.06 = \$761.16$