Elkford Logging’s bank will fix the interest rate on a $60,000 loan at 8.1% compounded monthly for the first four years. After four years, the interest rate will be fixed at the prevailing five-year rate. Monthly payments of $800 (except for a smaller final payment) are required on the loan.
a. If the interest rate after four years is 7.5% compounded monthly, when will the loan be paid off?
b. What will be the amount of the final payment?
c. What is the interest portion of the thirty-second payment?
d. Calculate the principal portion of the fifty-eighth payment.