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You decide to purchase a tractor for a net cost of $300,000. You finance this tractor for 5 years at 6.0% interest. You make

You decide to purchase a tractor for a net cost of $300,000. You finance this tractor for 5 years at 6.0%

You decide to purchase a tractor for a net cost of $300,000. You finance this tractor for 5 years at 6.0% interest. You make one payment per year using equal principal payments. Calculate your annual payments and the amortization (payoff schedule). Is the total cost of this loan more or less than if you had used the equal total payments formula? Explain.

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To calculate the annual payments and the amortization schedule for the tractor loan we can use the formula for equal principal payments Given Net cost ... blur-text-image

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