Roseanne wants to borrow $40,000 for a period of five years. The lender offers her a...

Roseanne wants to borrow $40,000 for a period of five years. The lender offers her a choice if 3 payment
structures. The first one; pay all of the interest (10%) and principal in one lump sum at the end of five years. The second; pay interest at the rate of 10% for 4 years and then a final payment of interest and principal at the end of the fifth year.
The third payment would be to pay five equal payments at the end of each year inclusive of the I interest rate 10% and part of the principal.
Calculate the total payment and the total interest pay under each alternative, also which payment structure should Rosaenne choose and why?

Expert Solution

jeff jeffy answered 2 years ago

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