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  3. a 3) tom establishes a seven-year, 8 percent loan

a 3) Tom establishes a seven-year, 8 percent loan with a bank requiring annual end-of-year...

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a 3) Tom establishes a seven-year, 8 percent loan with a bank requiring annual end-of-year payments of $960.43. Calculate the original principal amount. 4) Mr. Smith has been awarded a bonus for his outstanding work. His employer offers him a choice of a lump-sum of $5,000 today, or an annuity of $1,250 a year for the next five years. Which option should Mr. Smith choose if his opportunity cost is 9 percent

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