John Black is considering to purchasing a land from Real Estate Ltd for $1,000,000. The terms of the agreement are, 10% down payment, and the balance is to be repaid at 20% interest for duration of five (5) years.

1.If payment should be made at the beginning of each year, calculate the five (5) equal payments that would amortize this loan.

2.If payment should be made at the end of each year, calculate the five (5) equal payments that would amortize this loan.

3.Considering part (b), prepare the amortization schedule for this loan.

How much interest is paid over the life of the loan?