Assume a borrower is given the following options for payment of a $100,000 loan: 5-year amortizing loan paying annual interest rates of 8%5-year non-amortizing loan with principal payment at maturity paying annual rates of 8% 5-year amortizing loan with interest payments only of 8% for years 1-3 and principal of $50,000 for years 4-5. Show the payments for all three loans, including interest and principal payments, and balances every year.

Assume a borrower is given the following options for payment of a $100,000 loan: 5-year amortizing loan paying annual interest rates of 8%5-year non-amortizing loan with principal payment at maturity paying annual rates of 8% 5-year amortizing loan with interest payments only of 8% for years 1-3 and principal of $50,000 for years 4-5. Show the payments for all three loans, including interest and principal payments, and balances every year.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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