Company A borrows $2,000,000 from Bank at 12% interest to be paid at the end of each year for 15 years. Find for the annual total payments under (a) equal annual amortization and (b) equal principal payment methods if a 3-year grace period is charged on both principal and interest. Construct a complete amortization schedule for each scheme. Year Outstanding Balance Principal Payment Interest Payment Total Payment 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Company A borrows $2,000,000 from Bank at 12% interest to be paid at the end of each year for 15 years. Find for the annual total payments under (a) equal annual amortization and (b) equal principal payment methods if a 3-year grace period is charged on both principal and interest. Construct a complete amortization schedule for each scheme. Year Outstanding Balance Principal Payment Interest Payment Total Payment 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Company A borrows $2,000,000 from Bank at 12% interest to be paid at the end of each year for 15 years. Find for the annual total payments under (a) equal annual amortization and (b) equal principal payment methods if a 3-year grace period is charged on both principal and interest. Construct a complete amortization schedule for each scheme.
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