In order to buy new equipment, your company took a $150,000 loan to be paid over 15 years with a nominal annual rate of 2.5%. You make monthly payments, at the end of each month. 1. 

How much interest will you pay in the first year? Enter your formula, using a single function, in cell B9. 

2. How much will you still owe after two years (i.e. what is the outstanding principal after two years)? Enter your formula in cell B10. Hint. From the initial principal subtract... 3. Assuming Declining Balance depreciation, if you plan to use the equipment for 20 years and then sell it for $50,000, what is the depreciation expense you can report on your income statement for the first year of using the equipment? Enter your formula in cell B11.

Answer rating: 100% (QA)

Lets break down each question step by step 1 To calculate the interest paid in the first year we can use the PMT function in Excel which calculates the payment for a loan based on constant payments an... View the full answer