Wayne State offers a tuition financing plan where a $40,000 loan taken at the beginning of the freshman year would pay for all 4 years of college tuition. The plan calls for the loan to be repaid over a ten year period starting 5 years from the date of original enrollment. The loan payment amount is fixed for the first five years and then increases yearly by $1,000 per year for the last five years. Miriam took this loan and graduated on schedule after four years. What is the starting annual payment that she would have to make? Assume the interest rate is 7% per year.
Need to show work