1. compound, real , simple

2 . smallest or largest

3 declines or increses

4.smallest or largest

5.declines or increases

Time Value of Money: Amortized Loans An extremely important application of interest involves amortized loans. Some common types of amortized loans are automobile loans, home mortgage loans, student loans, and many business loans. Each loan payment consists of interest and repayment of principal, This breakdown is often developed in an amortization schedule. Imerest is in the first period and. over the life of the loan, whlle the principal part repayment is in the first period and it Quantitative Problem: You need $18,000 to putchase a used car. Your wealthy uncle is willing to lend you the money as an amortized loan. He would like you to make annual payments for 5 years, with the first payment to be made one year from today. He requires a 7% annual return, Do not round intermediate calculations. Round your answers to the. nearest cent. a. What wili be your anewusi loan payments? \$) b. How much of your first poyment will be applied to interest and to principal repayment? Interent: 1 Priocigal repayment: 5 Time Value of Money: Amortized Loans An extremely important application 5 student loans, and many business ic Interest is in the first pe erest involves amortired loans. Some common types of amortized loans are automoble loans, home mortgage louns, nearest cent. a. What wim be your annual ioan payments? b. How much of yeur first payment wil be appled to interest and to princloal repaymemt? interest: 5 Pripcipai repaymentis