Originally Posted by
chewitard "A 30-year loan of 1000 is repaid with payments at the end of each year. Each of the first ten payments equals the amount of interest due. Each of the next ten payments equals 150% of the amount of interest due. Each of the last ten payments is X. The lender charges interest at an effective annual rate of 10%. Calculate X."
I'm not quite sure how to solve this question. Since the first ten payments equal the amount of interest due, would it be right to assume the outstanding balance for the first ten years remain at 1000?
The answer should be X = 97.44