As part of their overall improvements, the owners also applied for a loan for cabin...
70.2K
Verified Solution
Link Copied!
Question
Finance
As part of their overall improvements, the owners also applied for a loan for cabin renovations totalling $85,500 at 6.8% compounded quarterly. The agreement requires end-of-month payments of $1200 (except for a smaller final payment).
a) How many payments are required to repay the loan?
B) hat is the term of the loan in years and months? Make sure your answer is active and linked to the solution from [a].
C) Prepare an amortization schedule showing the first and last 10 payments of the loan. Make sure your payment is rounded to the nearest cent. Express totals at the bottom of each column as currency.
d) What is the principal reduction in the 2nd year?
E) What is the total cost of financing the debt?
F) If the manager makes a lump sum payment of $12,000 at the end of the third year, by how much is the amortization period shortened?
G) How much interest is saved by making the lump sum payment of $12,000?
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
