Question
6. (8 points) Delos borrowed 200 million two years ago. The loan agreement, an amortizing loan, was for 5 years at 7.625% interest per annum.
6. (8 points) Delos borrowed 200 million two years ago. The loan agreement, an amortizing loan, was for 5 years at 7.625% interest per annum. Delos has successfully completed two years of debt-service, but now wishes to renegotiate the terms of the loan with the lender to reduce its annual payments.
a. What were Delos's annual principal and interest payments under the original loan agreement?
b. After two years debt-service, how much of the principal is still outstanding?
c. If the loan was restructured to extend another two years, what would the annual payments -- principal and interest -- be?
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