Q1: How Much is that Last Payment? LAST PAYMENT Your company has a $100,000 loan for a new security system it just bought. Your company decides that it can afford to pay $10,000 per year and the interest rate is 8% per year. After how many payments (years) will the loan be paid off? We determined that the loan could be paid in full after 21 years if the annual payment was $10,000. As with most real-life loans, the final payment will be something different (usually less) than the annuity amount. This is due to the effect of rounding in the interest calculationsyou can't pay in fractions of a cent! For this example, determine the amount of the 21st (and final) payment on the $100,000 loan when 20 payments of $10,000 have already been made. The interest rate remains at 8% per year. 38