use tables and cash flow diagram: Gesky Industrial Products manufactures brushless blowers for boilers, food service equipment, kilns, and fuel cells. The company borrowed $18,000,000 for a plant expansion and repaid the loan in seven annual payments of $3,576,420, with the fi rst payment made 1 year after the company received the money. What was the interest rate on the loan? Use hand and spreadsheet solutions.
| Total Borrowings | 1,80,00,000 |
| Year | Payment |
| 1 | 35,76,420 |
| 2 | 35,76,420 |
| 3 | 35,76,420 |
| 4 | 35,76,420 |
| 5 | 35,76,420 |
| 6 | 35,76,420 |
| 7 | 35,76,420 |
| Total Paid | 2,50,34,940 |
| Interest Paid | 70,34,940 |
| Yearly Payment | 10,04,991 |
| Rate of Interest (%) | 5.58 |
Consider the table above for the solution to the question. The rate of interest paid on the loan comes out to 5.58% simple interest.
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