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

Loan amount $787,000

Interest Rate 13.9%

Life 41 years

Date of Loan January 1, 2023

Use the installment method - not straight line

Do NOT round any interrmediate numbers.

Do NOT turn this into a monthly problem.

Do NOT put in minus signs, answer all positive numbers.

Required:

1. What is the annual payment (round to the nearest $)?

$

2. What are the total interest payments (round to the nearest $)?

$

3. After 24 payments have been made, what percentage of the total interest has been paid (round to the nearest percentage point)?

%

4. After 24 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%

(for a well designed spreadsheet this should take 30 seconds)

Required:

5. What is the annual payment (round to the nearest $)?

$

6. What are the total interest payments (round to the nearest $)?

$

7. After 24 payments have been made, what percentage of the total interest has been paid (round to the nearest percentage point)?

%

8. After 24 payments have been made, what percentage of the total principal has been paid (round to the nearest percentage point)?

%