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Tom borrows $100 at annual effective interest rate of 4% and agrees to repay it with...

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Advance Math

Tom borrows $100 at annual effective interest rate of 4% andagrees to repay it with 30 annual installments. The amount of eachpayment in the last 20years is set at twice that in the first 10years. At the end of 10 years, Tom has the option to repay theentire loan with a final payment $X, in addition to the regularpayment. This will yield the lender an annual effective rate of4.5% over the 10-year period. Calculate $X? (ANS: 108.88)

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