Madison Corp. took out a $120,000 loan at 10% interest for4 years. It repays the loan in equal annual payments of$38,000, beginning one year after the loan date.What portion of the first payment is principal repayment?

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Answered: Madison Corp. took out a $120,000 loan…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 17P

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Madison Corp. took out a $120,000 loan at 10% interest for 4 years. It repays the loan in equal annual payments of $38,000, beginning one year after the loan date. What portion of the first payment is principal repayment?