A 20 year loan is being repaid with 20 annual non-level (end-of-year) payments. The first (11) payment is $2,500. The second payment is $2,400. The payments continue to decrease until the last payment of $600 is paid. The interest rate on the loan is an annual effective rate of 6%.

(a) Determine the outstanding loan balance at time t = 10 years (right after the 10th payment).

(b) Determine the principal in the 11th payment.

*PLEASE NO EXCEL! ONLY FORMULAS!*