PROBLEM 1.

Lucky Dragon Restaurant obtained a $9000 loan at 9% compounded annually to replace some kitchen equipment.

Required:

1. Complete the amortization schedule if payments of $1800 (except for a smaller final payment) are made semiannually. (8 marks)

2. What total interest will the Lucky Dragon Restaurant pay over the life of the loan? (2 marks)

PMT #	Payment ($)	Interest ($)	Principal Reduction ($)	Balance ($)
0	-	-	-	9000.00
1	1800.00	396.28	1403.72	7596.28
2	1800.00	334.47	1465.53	6130.75
3	1800.00	269.94	1530.06	4600.69
4	1800.00	202.57	1597.43	3003.26
5
6