You borrowed $200,000 from the Bank of Nova Scotia. The loan is to be repaid at the end of five (5) years. The bank is to receive 8% interest on the loan balance that is outstanding. i. Calculate the yearly payment on a $200 000 loan. ii. Prepare an amortization schedule for this loan. iii. What is the loan balance just after the end of year two (2)? iv. What is the total interest paid over the life of the loan? v. What is the effective rate of interest on the loan if interest is compounded quarterly?

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Calculating the Return On A Loan