Scenario A contractor purchased heavy equipment at a cost of $620,000. The contractor was able to finance the purchase with a loan for the total amount at an annual nominal interest rate of 6.50% (compounded monthly), to be repaid over 30 years.

a. What is the loan balance after repaying the loan for 15 years?

b. How much is the amount of payment #181 corresponding to financing charges (Interest)?

c. How much is the amount of payment #181 that will be deducted from the principal amount owed up to that point (Principal)?

d. What is the total amount of financing charges (interest) for the entire loan?

e. How much money will the contractor save in interest if the $620,000 loan is paid off after making monthly payments for 15 years?

f. What is the effective annual interest of the loan?

Show your calculations demonstrating how you got to the result.