You borrow money on a self liquidating installment loan (equal payments at the end of each year, each payment is part principal part interest)
| Loan amount | $824,000 |
| Interest Rate | 10.6% |
| Life | 43 years |
| Date of Loan | January 1, 2021 |
Use the installment method – not straight line
Do NOT round any interrmediate numbers.
Do NOT turn this into a monthly problem.
Do NOT put in minus signs, answer all positive numbers.
Required:
1. What is the annual payment (round to the nearest $)?
$
2. What are the total interest payments (round to the nearest $)?
$
3. After 24 payments have been made, what percentage of the total interest has been paid (round to the nearest percentage point)?
%
4. After 24 payments have been made, what percentage of the total principal has been paid (round to the nearest percentage point)?
%
Redo the problem if the interest rate is 2%
(for a well designed spreadsheet this should take 30 seconds)
Required:
5. What is the annual payment (round to the nearest $)?
$
6. What are the total interest payments (round to the nearest $)?
$
7. After 24 payments have been made, what percentage of the total interest has been paid (round to the nearest percentage point)?
%
8. After 24 payments have been made, what percentage of the total principal has been paid (round to the nearest percentage point)?
%
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