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Zero's wants to purchase an asset that costs $150,000. The full amount needed to finance the...

Zero's wants to purchase an asset that costs $150,000. The full amount needed to finance the asset can be borrowed at 12% interest. The terms of the loan require equal end-of-year payments for the next 6 years. a) Determine the total annual loan payment. b) What is the total interest to be paid in year 4?

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Answer #1

PART a- Computation of Annual Loan Payment (EMI)

Thus, Annual Loan Payment = $36,483.86

PART b- Computation of Interest for Year 4

Interest component for Year 4 = $10,515.37

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