# Luke borrows $200 000 from a bank to set up a medical practice. He agrees to pay a fixed interest

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## Question:

Luke borrows $200 000 from a bank to set up a medical practice. He agrees to pay a fixed interest rate of 18.48% per year (calculated monthly) and to repay by equal monthly instalments over 10 years.

Calculate the monthly payment and breakdown the first two payments into interest and principal components. Also, how does the last payment breakdown?

**Related Book For**

## Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

ISBN: 978-1337614689

9th edition

Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

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**Question Details**

Chapter #

**5**- Risk AnalysisSection: INTEGRATIVE CASE

Problem: 2