Suppose that the loan in Problem 4 permits an additional prepayment of principal on any scheduled payment date. Prepare another amortization schedule that reflects a prepayment of $10,000 with the second scheduled payment. How much interest is saved as a result of the prepayment?
In Problem 4
Valley Produce received $50,000 in vendor financing at 7.8% compounded semiannually for the purchase of harvesting machinery. The contract requires equal annual payments for seven years to repay the debt.