12.

Determine the annual payment on a $500,000, 12 percent business loan from a commercial bank that is to be amortized over a five-year period.

13.

Determine the annual payment on a $15,000 loan that is to be amortized over a four-year period and carries a 10 percent interest rate. Prepare a loan amortization schedule for this loan.

14.

You are considering borrowing $150,000 to purchase a new home.

a. Calculate the monthly payment needed to amortize an 8 percent fixed-rate 30-year mortgage loan.

b. Calculate the monthly amortization payment if the loan in (a) was for 15 years.

15.

Assume a bank loan requires an interest payment of $85 per year and a principal payment of $1,000 at the end of the loans eight-year life.

a. At what amount could this loan be sold for to another bank if loans of similar quality carried an 8.5 percent interest rate? That is, what would be the present value (PV) of this loan?

b. Now, if interest rates on other similar quality loans are 10 percent, what would be the PV of this loan?

c. What would be the PV of the loan if the interest rate is 8 percent on similar quality loans?

16.

Use a financial calculator or computer software program to answer the following questions:

a. What would be the future value (FV) of $15,555 invested now if it earns interest at 14.5 percent for seven years?

b. What would be the FV of $19,378 invested now if the money remains deposited for eight years and the annual interest rate is 18 percent?