From "Principles of Engineering Economic Analysis: Fifth Edition" by White, Case and Pratt.
Question 2.59 states: Ken Loans his grandson Rex $20,000 at 5.5% per year to help pay for schooling. Rex Requires 3 years of schooling before beginning to earn a salary. He agrees to pay Ken back the loan following the schedule below.
End of Year012345678
Cash Flow$20,000 $0 $0 $0 -$X-$2X-$3X-$4X-$5X
b. Find the Value of X, so the loan is repaid with the last payment?
c. what is the dollar amount of each of the 5 payments?
d. Ken gives Rex back all the interest he paid. What is amount given?
I Can not figure out how to do this. I know it is an Arithmetic Gradient but that's about all I know...
Question 2.59 states: Ken Loans his grandson Rex $20,000 at 5.5% per year to help pay for schooling. Rex Requires 3 years of schooling before beginning to earn a salary. He agrees to pay Ken back the loan following the schedule below.
End of Year012345678
Cash Flow$20,000 $0 $0 $0 -$X-$2X-$3X-$4X-$5X
b. Find the Value of X, so the loan is repaid with the last payment?
c. what is the dollar amount of each of the 5 payments?
d. Ken gives Rex back all the interest he paid. What is amount given?
I Can not figure out how to do this. I know it is an Arithmetic Gradient but that's about all I know...