# Instructions Draw Cash flow diagrams Set up and solve problem in Excel If a person borrows…

Instructions

Draw Cash flow diagrams

Set up and solve problem in Excel

If a person borrows $8000 from her bank at an interest rate of

12% per year for three years, how much must she repay at that time

(end of year 3) if:

a) the interest is compounded annually

b) the interest is compounded quarterly

Suppose the bank wanted three equal repayments at the

end of each year; Assume interest is compounded annually. What

would the repayment amounts be?