Louie borrowed $2,000 from Phil. Under this agreement, Louie would repay with $1,200 at t = 1 and $1,700 at t = 4 where time is given in years. Louie successfully made the payment in full at t = 1,...


Louie borrowed $2,000 from Phil. Under this agreement, Louie would<br>repay with $1,200 at t = 1 and $1,700 at t = 4 where time is given<br>in years. Louie successfully made the payment in full at t = 1, but he<br>faced some financial difficulty and was only able to pay 60% of what he<br>owed at the time of the second payment. What was the annual interest<br>rate for the original loan? What is Phil's annual yield for this four-year<br>period?<br>%D<br>

Extracted text: Louie borrowed $2,000 from Phil. Under this agreement, Louie would repay with $1,200 at t = 1 and $1,700 at t = 4 where time is given in years. Louie successfully made the payment in full at t = 1, but he faced some financial difficulty and was only able to pay 60% of what he owed at the time of the second payment. What was the annual interest rate for the original loan? What is Phil's annual yield for this four-year period? %D

Jun 05, 2022
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