Question

Suppose you borrowed $14,000 at a rate of 10% and must repay it in five equal installments at the end of each of the next five years. How much interest would you have to pay in the first year?

Answer 1

	Annual Installment =	Amount payable /Sum of PFV of 10% for 5yrs
		=$14000/3.791
		= $3693
	loan repayment schedule
	Principal Outstanding on starting of the year	intt paid	principal repaid	Principal Outstanding at end of the year
1	14000	1400	2293	11707
2	11707	1170.7	2522.3	9184.7
3	9184.7	918.47	2774.53	6410.17
4	6410.17	641.017	3051.983	3358.187
5	3358.187	335.8187	3358.187	0
	Intt paid in year 1 $1400