A bank makes a 5-year $75,000 loan with no principal payments in years 1-2 and principal payments of $25,000 in Years 3, 4 and 5. The interest rate is 8% and will be paid every year. What interest and principal is paid in year 4 $6,000 + $25,000 $6,000+$50,000 $4,000+$25,000 $4,000+$50,000 QUESTION 2 A bank makes an amortizing loan of $200,000 with a maturity of 8 years and equal payments every year. What is the principal outstanding at the end of year 6 if the interest rate is 6%? $27,041.78 $30,384.41 $59,048.42 $86,092.20
QUESTION 1
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A bank makes a 5-year $75,000 loan with no principal payments in years 1-2 and principal payments of $25,000 in Years 3, 4 and 5. The interest rate is 8% and will be paid every year. What interest and principal is paid in year 4
$6,000 + $25,000
$6,000+$50,000
$4,000+$25,000
$4,000+$50,000
QUESTION 2
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A bank makes an amortizing loan of $200,000 with a maturity of 8 years and equal payments every year. What is the principal outstanding at the end of year 6 if the interest rate is 6%?
$27,041.78
$30,384.41
$59,048.42
$86,092.20
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The long-term loan that was obtained from the lender is being repaid in monthly mortgage installments. A predetermined interest rate will be paid on top of the borrowed amount when it is repaid. Mortgage payments and loan term are directly correlated.
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