Julie and John Aggie want to purchase $80$ acres of farm land valued at $$1,500$ per acre. Their lender requires a $30\%$ down payment. Assume twenty annual payments. The interest rate is $8\%.$

A$)$ Calculate the schedule of interest and principal payment over the life of the loan using the constant payment method and the constant payment method on principal method.

B$)$ What is the total interest paid over the life of the loan with each method?

C$)$ Calculate the interest and principle payment schedule for a $5$ year balloon payment loan. Assume the annual payments $8\%$ interest rate, and a twenty year amortization schedule.

Answer rating: 100% (QA)

A Schedule of Interest and Principal Payment To calculate the schedule of interest and principal payments over the life of the loan we will use the constant payment method and the constant payment met... View the full answer