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Keep the Highest / 1 10. 20: Time Value of Money: Amortized Loans An important application of Select interest involves amortized loans. Some common types of amortized loans are automobile foars, home mortgage loans, and business loans. Each loan payment consists of interest and repayment of principal. This breakdown is often developed in an amortization schedule. Interest is Select in the first period and Select over the life of the loan, while the principal repayment is Select in the first period and itSelect- thereafter Quantitative Problem: You need $20,000 to purchase 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 an 8% annual return 3. What will be your annual loan payments? Do not round Intermediate calculations. Round your answer to the nearest cont b. How much of your first payment will be applied to interest and to principal repayment? Do not round intermediate calculations. Round your answers to the nearest cent. Interestis Principal repayment: $