You borrowed $20,000 today from your uncle to finance your college education. Your uncle is very flexible in your repayment plan, but he will charge an 8% interest compounded annually for any unpaid balance. Suppose your payment plan is as follows
payment one: $5,000 two years from now
payment two: $7,000 three years from now
payment three: $X five years from now
How much (X) do you need to come up with in year five to ensure you have the necessary funds to pay off the loan?
a. $10,640
b. $14,923
c. $15,981
d. $13,562