Question
Chuck Ponzi has talked an elderly woman into loaning him $35000 for a new business venture. She has, however, successfully passed a finance class and
Chuck Ponzi has talked an elderly woman into loaning him $35000 for a new business venture. She has, however, successfully passed a finance class and requires Chuck to sign a binding contract on repayment of the 35000 with an annual interest rate of 8% over the next 5 years. Ponzi may choose to pay off the loan early if interest rates change during the next 5 years. Determine the ending balance of the loan each year under the three different payment plans: a. the discount loan b. the interest-only loan c. the fully amortized loan. a.If Chuck chooses the discount loan,
what is the ending balance of the discount loan in year 1?
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