Question: a. 2. Consider a 5-year amortizing loan. You borrow $5,000 initially and repay it in five equal annual year-end payments. If the interest rate is

a. 2. Consider a 5-year amortizing loan. You borrow $5,000 initially

a. 2. Consider a 5-year amortizing loan. You borrow $5,000 initially and repay it in five equal annual year-end payments. If the interest rate is 4%, what is the annual payment? b. Fill in the following table, which shows how much of each payment is interest versus principal repayment (that is, amortization) and the outstanding balance on the loan at each date. Year Loan Balance ($) Year End Interest due on Loan Balance ($) Total Year End Payment ($) Amortization of Loan ($) 1 $5,000.00 2 3 4 5

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