Question
A loan is being repaid with level annual payments of $1000 followed by a drop payment. The loan has an annual effective interest rate of
A loan is being repaid with level annual payments of $1000 followed by a drop payment. The loan has an annual effective interest rate of 3%. The outstanding loan balance right after 3rd payment is $20,000. Calculate the amount of interest and the amount of principal in the 5th payment.
A. 410
B. 412
C. 414
D. 416
E. 418
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International Financial Management
Authors: Jeff Madura
3rd Edition
0314862722, 978-0314862723
