1. Eva Forlines Fashions Corporation wishes to borrow $600,000 on a five-year term basis. Cattlepersons National Bank is willing to make such a loan at a 14 percent rate, provided the loan is completely amortized over the five-year period. Payments are due at the end of each of the five years. Set up an amortization schedule of equal annual loan payments that will satisfy these conditions. Be sure to show both the principal and interest components of each of the overall payments.

2. Given the following information, compute the annual lease payment (paid in advance) that a lessor will require: a. Purchase price of $260,000, interest rate of 13 percent, 5-year lease period, and no residual value b. Purchase price of $138,000, interest rate of 6 percent, 9-year lease period, and a nearcertain residual value of $20,000 c. Purchase price of $773,000, interest rate of 9 percent, 10-year lease period, and no residual value