Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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 $615,000
Interest Rate 14.6%
Life 56 years
Date of Loan January 1, 2021

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

%

4. After 22 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 22 payments have been made, what percentage of the total interest has been paid (round to the nearest percentage point)?

%

8. After 22 payments have been made, what percentage of the total principal has been paid (round to the nearest percentage point)?

%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Clinical Audit In Mental Health Toward A Multidisciplinary Approach

Authors: John Riordan, Darren Mockler

1st Edition

0471963321, 978-0471963325

More Books

Students also viewed these Accounting questions

Question

Additional Factors Affecting Group Communication?

Answered: 1 week ago