Very flexible in your repayment plan

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Reference no: EM13766814

You borrowed $20,000 today from your uncle to finance your college education. Your uncle is very flexible in your repayment plan, but he will charge an 8% interest compounded annually for any unpaid balance. Suppose your payment plan is as follows

payment one: $5,000 two years from now

payment two: $7,000 three years from now

payment three: $X five years from now

How much (X) do you need to come up with in year five to ensure you have the necessary funds to pay off the loan?

a. $10,640

b. $14,923

c. $15,981

d. $13,562

Reference no: EM13766814

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