2. They also borrowed $12,000 from Farm Credit Services to buy some sows. They agreed to pay it back with 3 annual payments, plus 8% interest on the remaining loan balance. If the loan is amortized under the equal principal payment plan, how much did they have to pay each time? Assume the first payment is exactly one year after the loan is received, and the other two payments are exactly one year apart.

	Principal	Interest	Total Payment	Balance Remaining
1st payment	__$4,000.00___	___$960.00___	__$4,960.00___	__$8,000.00_____
2nd payment	_$4,000.00____	__$640.00____	__$4,640.00___	___$4,000.00___
3rd payment	__$4,000.00__	__$320.00___	__$4,320.00__	___$0__________
Total	__$12,000.00__	__$1,920_______	__$13,920.00_____

3.How much would their payments be if they were amortized under the equal total payment plan? The amortization factor for a 3-period loan at 8% interest is .388.

	Total Payment	Interest	Principal	Balance Remaining
1st payment	$4,656.40_	_$960.00_	_$3696.40__	__$8,303.60_
2nd payment	_$4,656.40__	_$664.29___	__$3,992.11__	_$4311.48__
3rd payment	_$4,656.40__	_$344.92__	__$4311.48___	___$0________
Total	__$13,969.2___	$1,969.21_____	__$11,999.99____

4. Matt and Brenda were afraid that the payments the first two years would be two high for them. They arranged a balloon payment loan, with $2,000 principal due each of the first two years, and the remaining $8,000 due the last year. How much would their payments be under this plan?

	Principal	Interest	Total Payment	Balance Remaining
1st payment	_____________	_____________	_____________	_____________
2nd payment	_____________	_____________	_____________	_____________
3rd payment	_____________	_____________	_____________	_____________
Total	_____________	_____________	_____________