Jonathan wishes to borrow $180 000 from a commercial bank. He was told that the loan would be amortized over five years and that payment could be made at the beginning or at the end of each year. Please assist Jonathan by answering the following questions. a. Explain to Jonathan, what is the purpose of a loan amortization schedule?  b. Jonathan borrows $180 000 at 9% per annum for five years. The loan is repayable in five equal instalments at the beginning of the year. What is the annual payment?

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
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Jonathan wishes to borrow $180 000 from a commercial bank. He was told that the loan would be amortized

over five years and that payment could be made at the beginning or at the end of each year. Please assist

Jonathan by answering the following questions.

a. Explain to Jonathan, what is the purpose of a loan amortization schedule? 

b. Jonathan borrows $180 000 at 9% per annum for five years. The loan is repayable in five equal instalments

at the beginning of the year. What is the annual payment?

 

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