The table 5-1 is shown below

Determine the yearly interest and principal payments using the four methods of debt payment shown in Table 5-1 if the amount borrowed is $100,000, the loan is to be paid back in eight years, and the loan interest rate is 10%. Also determine the total present value of principal and interest for the four methods using the following discount rates: (a) 5%, (b) 10% and (c) 15%. Using these results, are any generalizations possible? Investment Tax Credit (1985): Four methods for debt payment: Single payment of debt and interest: B = P; F = P + I; F = P(F|P, i, n); where i is the interest rate, n is the number of years. Constant interest payment; the constant interest paid in years one through n is: P = B, I = B * Kd Constant principle payment: P = B_j; B_j = c * K I = (B - P(n-1)) * K_d; where K_d is the cost of debt capital. Constant payment: F = P + I; B = P, A = P(A/P i, n) I_j = (P - sigma^j-1_k=1 P_k) * i P_J = T - I_J