(b) [5] Find the new level annual payment amount for the remaining 6 years.

[15] A loan of $20,000 is to be repaid in 12 annual payments, each payable at year-end, with payment increasing by 4% per year. The annual effective interest rate is 8%. Due to financial difficulties, the lender agrees that the borrower may skip the 5th and 6th payments. Immediately after the 6th payment would have been paid, the loan is renegotiated to at a new annual effective interest rate of 10% for the remaining 6 years with level annual payments. (a) [10] Compute the outstanding loan balance at the time that the 6th payment should have been made. [15] A loan of $20,000 is to be repaid in 12 annual payments, each payable at year-end, with payment increasing by 4% per year. The annual effective interest rate is 8%. Due to financial difficulties, the lender agrees that the borrower may skip the 5th and 6th payments. Immediately after the 6th payment would have been paid, the loan is renegotiated to at a new annual effective interest rate of 10% for the remaining 6 years with level annual payments. (a) [10] Compute the outstanding loan balance at the time that the 6th payment should have been made