Answer in there was wrong. Please help. Thank you Homework: HW2 Score: 0 of 2 pt
ID: 1147125 • Letter: A
Question
Answer in there was wrong. Please help. Thank you Homework: HW2 Score: 0 of 2 pts Problem 4-67 (algorithmic) In recent years, the typical American household spends $14,000 more than i makes and t does this for six consecutive years. If this debt will be financed at an 5 of 5 (4 HW Score: 80%, 8 of 10 pts per year, what annual repayment will be required to repay the debt over a 9-year period (repayments will tart at E positive savings" nation to a "negative savings" nation (Gie, we spend more money than we eam) . Suppose a table for disorete compounding when ,-12% per year The required annual repayment is s 20109 50 thousands. (Round to two decimal places ) All parts showing TUTORS CHATExplanation / Answer
interest rate = 12%
FV (debt at the end of 6 years) = 14000 x (1 + 12%)5 + 14000 x (1 + 12%)4 + .... + 14000 x (1 + 12%)0
FV = $113612.6
time period = 9 years
Annual repayment = y
FV (debt at the end of 6 years) = PV of annual payments (for 9 years)
y/1.12 + y/1.122 + .... + y/1.129 = 113612.6
Solve for 'y':
y = $21322.7