Chelu and Jiga want to purchase $120$ acres of farm land valued at K$150,000$ per acre. Their

lender requires a $40\%$ down payment. Assume twenty annual payments. The interest rate is

$22\mathrm{.}5\%.$

a$)$ Calculate the schedule of interest and principal payment over the life of the loan using the

constant payment method and the constant payment on principal method.

b$)$ What is the total interest paid over the life of the loan with each method?

c$)$ Calculate the interest and principal payment schedule for a $5-$year balloon payment loan.

Assume annual payments, $22\mathrm{.}5\%$ interest rate, and a twenty year amortization schedule.

d$)$ Contrast the various types of operating loans: standard, non$-$revolving, and revolving. Which

is best suited for a cash grain farm? A dairy farm? A large cattle feedlot? Why?