A loan is being repaid by 20 annual payments. The first 5 installments are 300 each,

the next 8 are 400 each, and the last 7 are 600 each. Assume i = .14. (a) Find the loan balance immediately after the tenth payment.

(b) Divide the 11th payment into principal and interest.

Hint: To do this, you can use the result from (a) since interest is paid on the outstanding balance.

(c) Construct an amortization schedule for this loan and explain what you obtain. This can be easily done in Excel.