1. Mr Jones bought a building for $60,000, payable on the following terms: a $10,000 down payment and 25 equal annual payments to include principal and interest of 10 percent per annum. Calculate the amount of the installment payments. How much of the first year's payment goes toward reducing the principal amount?

2. Crab the State Bank has offered you a $1,00,000 five- year loan at an interest of 11.25 percent, requiring equal annual end-of-year payments that include both principal and interest on the unpaid balance. Develop an amortization schedule for this loan.