Amortizing Loan. Consider a 4-year amortizing loan. You borrow $1,000 initially and repay it in four equal
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Amortizing Loan. Consider a 4-year amortizing loan. You borrow $1,000 initially and repay it in four equal annual year-end payments.
a. If the interest rate is 8%, 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.
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
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