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2. A 4n year loan is to be paid back with level payments at the end of each year. Suppose that v^n = 0.80. a)

2. A 4n year loan is to be paid back with level payments at the end of each year. Suppose that v^n = 0.80.

a) After n years, what proportion of the original loan is still owed?

b) What proportion of the n+1st payment is principal and what proportion is interest?

Please show work!

v = 1 / (1+i)^n this is an actuarial science problem

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