What final payment will the bank require

Reference no: EM13266217

You have a loan outstanding. It requires making eight annual payments of $1000 each at the end of the next eight years. Your bank has offered to allow you to skip making the next seven payments in lieu of making one large payment at the end of loan's term in eight years. If the interest rate on the loan is 6%, what final payment will the bank require you to make so that it is indifferent to the two forms of payment?

Reference no: EM13266217

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