Amortization.Loan Consolidated Incorporated (LCI) is offering a special one-time package to reduce Custom Autos' outstanding bills to one easy-to-handle payment plan. LCI will pay off the current outstanding bills of $244,000 for Custom Autos if Custom Autos will make an annual payment to LCI at an interest rate of 8% over the next 5 years.

a.What are the annual payments of the loan?

b.What is the amortization schedule for this loan if Custom Autos wants to pay off the loan before the loan maturity in 5

years?

Principal reduction for year 1-5?

Interest expense of the loan for year 1-5?

c.When will the balance be half paid off?

d.What is the total interest expense on the loan over the 5

years?