Answer:
The installment will be for $ 4,148.010
Explanation:
There will be 7 payment starting at the beginning of the third year therefore, an annuity-due. Then It will capitalize one more year.
Thus, the annuity future value will be the 50,000 discounted one year.
[tex]\frac{Nominal}{(1 + rate)^{time} } = PV[/tex]
Nominal: 50,000.00
time: 1 year
rate: 11% = 11/100 = 0.11
[tex]\frac{50000}{(1 + 0.11)^{1} } = PV[/tex]
PV= 45,045.0450
Then we need to solve for the PMT of this annuity:
[tex]FV \div \frac{(1+r)^{time} -1}{rate}(1+r) = C\\[/tex]
PV: $ 45,045
time: 7 years
rate: 11% = 11/100 = 0.11
[tex]45045.045045045 \div \frac{(1+0.11)^{7} -1 }{0.11}(1+0.11) = C\\[/tex]
C $ 4,148.010