Question $1.$ Suppose that, in Plan $1$ of Table $4-1($of the payment plan handout$),$ $$8,500$ of the original unpaid balance is to be repaid at the end of months two and four only. How much total interest would have been paid by the end of month four?

Hint. In addition to the interest due, $$8,500$ of the principal will be paid at the end of month two, and another $$8,500$ will be paid at the end of the month four. The interest accrued will be different.

Question $2.$ Refer to Plan $2$ in Table $4-1$: This is the customary way to pay off loans on automobiles, house mortgages, etc. A friend of yours has financed $$24,000$ on the purchase of a new automobile, and the annual interest rate is $12\%(1\%$ per month, e$.$g$.,$ APR $12\%/12)$

a$.$ What would be the monthly payments over a $60-$month loan period?

b$.$ How much interest and principal will be paid in the third month of this loan?

Hint. Use the Excel macro, pmt$,$ to determine the monthly payment, and lay out plan $2$ as demonstrated in the video.

Question $3.$ Jonathan borrowed $$10,000$ at $6\%$ annual compound interest. He agreed to repay the loan with five equal annual payments at the end$-$of$-$years $1-5.$ How much of the annual payment is interest, and how much principal is there in each annual payment?

Hint. Determine the annual payment and lay out the plan $2$ schedule.