Indifferent to two forms of payment

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Reference no: EM131829557

You have a loan outstanding. It requires making nine annual payments of $8,000 each at the end of the next nine years. Your bank has offered to restructure the loan so that instead of making the nine payments as originally agreed, you will make only one final payment in nine years. If the interest rate on the loan is 7%, what final payment will the bank require you to make so that it is indifferent to the two forms of payment?

Reference no: EM131829557

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