Suppose you took out a loan to purchase a truck for your business valued at$40,000 and that the loanable amount will be paid off in 8 years. You traded in your old truck valued at $8,000 and the lender will give you a loan assessed to cost you 10% over the stated period. This suggests that you have an asset called a new truck listed on the assets' side, and, on the liability and equity side you will show the funding for the asset. 

Show your quarterly equal repayment amount in $ toward meeting the conditions of the loaned funds 

Construct a schedule over the full period remembering the loan is fully amortized over the full period. 

Suppose you want to pay off the loan in 7 years, what will be your payoff balance? Why is the lender requiring your trading value as a down payment on the new truck? 

Think about equity and co-pay and interest charged as a condition of the loan. Discuss all the loan options available to you and why you choose this particular lender.

Answer rating: 100% (QA)

SOLUTION To calculate the quarterly equal repayment amount for the loan we need to consider the loan amount interest rate and loan period Loan details ... View the full answer