# Question

a. Set up an amortization schedule for a $25,000 loan to be repaid in equal installments at the end of each of the next 5 years. The interest rate is 10 percent.

b. How large must each annual payment be if the loan is for $50,000? Assume that the interest rate remains at 10 percent and that the loan is paid off over 5 years.

c. How large must each payment be if the loan is for $50,000, the interest rate is 10 percent, and the loan is paid off in equal installments at the end of each of the next 10 years? This loan is for the same amount as the loan in part b, but the payments are spread out over twice as many periods. Why are these payments not half as large as the payments on the loan in part b?

b. How large must each annual payment be if the loan is for $50,000? Assume that the interest rate remains at 10 percent and that the loan is paid off over 5 years.

c. How large must each payment be if the loan is for $50,000, the interest rate is 10 percent, and the loan is paid off in equal installments at the end of each of the next 10 years? This loan is for the same amount as the loan in part b, but the payments are spread out over twice as many periods. Why are these payments not half as large as the payments on the loan in part b?

## Answer to relevant Questions

Hanebury Corporation’s current sales were $12 million. Sales were $6 million 5 years earlier.a. To the nearest percentage point, at what rate have sales been growing?b. Suppose someone calculated the sales growth for ...You need to accumulate $10,000. To do so, you plan to make deposits of $1,250 per year, with the first payment being made a year from today, in a bank account that pays 12 percent annual interest. Your last deposit will be ...Assume that your father is now 50 years old, that he plans to retire in 10 years, and that he expects to live for 25 years after he retires, that is, until he is 85. He wants a fixed retirement income that has the same ...An investor recently purchased a corporate bond which yields 9 percent. The investor is in the 36 percent combined federal and state tax bracket. What is the bond’s after-tax yield?Define the following terms, using graphs or equations to illustrate your answers wherever feasible:a. Stand-alone risk; risk; probability distributionb. Expected rate of return, rc. Continuous probability distributiond. ...Post your question

0