Chapter 5, Problem 2P

a.

Summary Introduction

Compute the monthly payments in first year (BOY).

b.

Summary Introduction

Find loan balance at the end of the first year.

c.

Summary Introduction

Calculate the monthly payment during second year when interest rate is expected 7%.

d.

Summary Introduction

Compute the loan balance at the EOY 2.

e.

Summary Introduction

Calculate the monthly payment in year 1 if it is interest only.