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You wish to borrow $3,000 for three years at 8% interest rate. The loan agreement calls...

You wish to borrow $3,000 for three years at 8% interest rate. The loan agreement calls for the borrower to pay the interest on the loan balance each year and to reduce the loan balance each year by $1000. What is the total interest payment over the whole life of the loan

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Answer #1

Solution :

The total amount of interest payment over the whole life of the loan is = $ 480

Please find attached screenshot of the excel sheet that contains the detailed calculation for the solution.

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