Question

You borrow $10,000 on January 1 and agree to pay off the loan with 10 annual end-of-year payments. Your annual effective interest rate is 5%. Complete the loan amortization table shown below for payment number 5 and payment number 6.

Payment number Payment Amount Principal Interest Loan Balance After Payment

5

6

Answer #1

You are the loan officer of a bank. The ABC Company wants to
borrow $100,000 and repay it with four equal annual payments (first
payment due one year from now). You decide that the ABC Company
should pay 0.10 per year on the loan.
a. What is the annual payment?
b. Complete the following debt amortization table:
Period
Amount owed(beginnig of yr)
Interest
Principal
Amount owed(end of yr)
1
$100,000
2
3
4
c. What would be the annual payment...

You borrow $70,000 and arrange to pay off the loan in five equal
annual installments.
Payments will be made at the end of each year. The loan interest
rate is 7.50 percent.
What percentage of your second year's payment will go toward
interest?
A.
19.5 percent
B.
17.2 percent
C.
80.5 percent
D.
28.7 percent
E.
25.1 percent

You
borrow $20000 and agree to pay it off with a single payment of
$35000 in 4 years. What annual rate of interest will you be
charged?

You are getting a six-month loan for new kitchen appliances,
where the principal is $10,000 and monthly interest is 1%. The
first payment will be made in a month from today. Find the equal
monthly payment and complete the following amortization table. [15
pts] Period Beginning, Balance Total Amount, Interest Payment,
Principal Payment , Ending Balance 1, 2, 3, 4, 5, 6

Today, you borrowed $20,000 and have agreed to pay off the loan
by making $500 weekly payments. Assume the effective weekly
interest rate is 0.2%. If you were preparing an amortization
schedule, what would be the ending balance after your first payment
(i.e. at the end of the first week)?

Today, you borrowed $5,000 and have agreed to pay off the loan
by making $250 weekly payments. Assume the effective weekly
interest rate is 0.1%. If you were preparing an amortization
schedule, what would be the ending balance after your first payment
(i.e. at the end of the first week)?

A loan of $10,000 is being repaid with 10 payments at the end of
each year at an annual effective rate of 5%. The payments grow by
10% each year. Find the amount of interest and principal paid in
the fifth payment. (Answer: $397.91, $837.97) Show all
calculations.

You borrow $300,000 to buy a house over a 15-year term. The
loan is structured as an amortized loan with annual payments and an
interest rate of 10%. Find the information for the amortization
schedule for years 1 and 2. Payment ($) Interest in Payment ($)
Principal Repaid ($) Principal Owing at End of Year ($)

Question 1.
Part A: A firm has agreed to pay off a 10 year loan by making
ten $4,000 annual payments starting next year and a $100,000 lump
sum payment in 10 years. If the fair market interest rate is 6% how
much can they borrow?
Part B: The firm instead decides they would rather make 10 equal
annual payments starting next year with no lump sum in 10 years.
What annual payments must they make to borrow the same...

If you borrow $1,800 and agree to repay the loan in four equal
annual payments at an interest rate of 10%, what will your payment
be? (Do not round intermediate calculations. Round your
answer to 2 decimal places.)
b. What will your payment be if you make the first
payment on the loan immediately instead of at the end of the first
year? (Do not round intermediate calculations. Round your
answer to 2 decimal places.)

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