Question: (question 16) Consider a 4-year amortizing loan. You borrow $1,300 initially, and repay it in four equal annual year-end payments. a. If the interest rate

(question 16)

(question 16) Consider a 4-year amortizing loan. You borrow $1,300 initially, and

Consider a 4-year amortizing loan. You borrow $1,300 initially, and repay it in four equal annual year-end payments. a. If the interest rate is 8%, calculate the annual payment. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Annual payment $ 392.50 b. Prepare an amortization schedule. (Leave no cells blank - be certain to enter "O" wherever required. Do not round intermediate calculations. Round your answers to 2 decimal places.) Loan Balance $ 1300 Year-End Interest Due on Balance $ Year-End Payment $ 392.50 392.50 392.50 392.50 Amortization of Loan $288.50 311.58 Time 0 1 2 3 4 1011.50 699.93 336.500 363.42 363.42 C-1. What is the loan balance after year 1? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Loan balance c-2. Is it the present value of the remaining loan payments? O No Yes

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