You borrow money on a self liquidating installement loan (equal payments at the end of each year, each payment is part principal part interest)

Loan $601,000

Interest Rate 17.70%

Life (years) 65

Date of Loan January 1, 2019

Use the installment method - not straight line

Do NOT round any interrmediate numbers.

Do NOT turn this into a monthly problem.

a) What is the annual payment?

b) What are the total interest payments?

c) After 36 payments have been made, what percentage of the total interest has been paid (round to the nearest percentage point)?

d) After 36 payments have been made, what percentage of the total principal has been paid (round to the nearest percentage point)? Redo the problem if the interest rate is 2.00% (for a well designed spreadsheet this should take 30 seconds)

e) What is the annual payment?

f) What are the total interest payments?

g) After 36 payments have been made, what percentage of the total interest has been paid (round to the nearest percentage point)?

h) After 36 payments have been made, what percentage of the total principal has been paid (round to the nearest percentage point)?

Use the following check digits:

Sum Total Cash flow = Sum interest paid

Owe at end = $0

Sum Principal repaid = amount borrowed

Sum Total Payment = Sum Interest paid + Sum principal repaid

IRR of the cash flows = interest rate