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Suppose that you wish to borrow $400,000 today to finance the purchase that you will repay me with equal quarterly payments over 15 years. 1.

Suppose that you wish to borrow $400,000 today to finance the purchase that you will repay me with equal quarterly payments over 15 years.

1. If the APR is 4.6%, how much will you pay me each quarter?

2. Amortize the first 2 payments. Make a table, and show the calculation of each cell in the table.

3. Suppose that you plan to pay off the loan immediately after payment 40. What is the remaining principal?

4. Calculate the interest to be paid under both the original scheme and with the early payment described in . How much interest would you save by making the early payment?

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