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self-liquidatingYou Borrow money on a self liquidating installment loan (equal payments at the end of each year, each payment is part principal part interest) Loan
| self-liquidatingYou Borrow money on a self liquidating installment loan (equal payments at the end of each year, each payment is part principal part interest) | ||||||||||
| Loan | $775,000 | |||||||||
| Interest Rate | 12.30% | |||||||||
| Life (years) | 52 | |||||||||
| Date of Loan | January 1, 2020 | |||||||||
| Use the installment method - not straight line | ||||||||||
| Do NOT round any intermediate numbers. | ||||||||||
| a) What is the annual payment? | ||||||||||
| b) What are the total interest payments? | ||||||||||
| c) After 21 payments have been made, what percentage of the total interest has been paid (round to the nearest percentage point)? | ||||||||||
| d) After 21 payments have been made, what percentage of the total principal has been paid (round to the nearest percentage point)? | ||||||||||
| For your own edification, redo the problem if the interest rate is 3% and find the answer to part d (for a well-designed spreadsheet this should take 30 seconds) | ||||||||||
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Financial Algebra advanced algebra with financial applications
Authors: Robert K. Gerver
1st edition
978-1285444857, 128544485X, 978-0357229101, 035722910X, 978-0538449670
