1. Liz Rogers just closed a $10,000/- business loan that is to be repaid in three equal annual end of year payments. The interest rate on the loan is 13%. As part of her firms detailed financial planning Liz wishes to determine the annual interest deduction attributable to the loan. (Because it is a business loan the interest portion of each loan payment is tax deductible to the business.

a. Determine the firms annual loan payment.

b. Prepare an amortization schedule for the loan.

c. How much interest expense will Lizs firm have in each of the next three years as a result of this loan?

2. If you invest $5000/- per year for next ten years at an 8% annual interest rate beginning one year from today compounded annually, how much you are going to have at the end of 10 years?

3. Joanne and Walker borrow $14568.50 for a new car before they moved to Stepford Connecticut. They are required to repay the amortized loan with four annual payments of $5000/- each. What is the interest rate on their loan?