Question
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)?
%
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