Question
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
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 $230,000 for Custom Autos if Custom Autos will make an annual payment to LCI at an interest rtae of 11% 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? c.When will the balance be half paid off?
d.What is the total interest expense on the loan over the 5 years?
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Modern Portfolio Theory and Investment Analysis
Authors: Edwin Elton, Martin Gruber, Stephen Brown, William Goetzmann
9th edition
9781118805800, 1118469941, 1118805801, 978-1118469941
