PFIN 5th Edition by Randall Billingsley,Lawrence Gitman,Michael Joehnk

Exercise 11

Calculating single-payment loan amount due at maturity. Eric Jernigan plans to borrow $8,000 for five years. The loan will be repaid with a single payment after five years, and the interest on the loan will be computed using the simple interest method at an annual rate of 6 percent. How much will Eric have to pay in five years? How much will he have to pay at maturity if he's required to make annual interest payments at the end of each year?