Elkford Logging’s bank will fix the interest rate on a $60,000 loan at 8.1% compounded monthly for the first four-year term of an eight-year amortization period. Monthly payments are required on the loan.
a. If the prevailing interest rate on four-year loans at the beginning of the second term is 7.5% compounded monthly, what will be the monthly payments for the last four years?
b. What will be the interest portion of the twenty-third payment?
c. Calculate the principal portion of the fifty-third payment.