Question

please type the answer by computer, do not hand writing the answer

and include the formula that you apply to solve the question

A company took decreasing amounts of loans for the first five years of its formation, as follows: 500K, 400K, 300K, 200K, 100K. In the subsequent years, it’s operation started becoming successful, and it started to pay back, at the end of each successive year, amounts of 100K, 200K, 300K, 400K, 500K.

Assuming a constant interest rate of 5% being charged for the entire period, how much does the company still owe at the end of the final payment of 500K? Please show the cash flow diagram.

Answer 1