As gyms are getting crowded by the day, you decided to invest in your own home-garage gym to squeeze in your daily pump. For this purpose, you decided to go for a 10,000$ bank loan at an interest rate of 10% for a 3 years duration. The bank suggested 3 main payment alternatives that you can choose from: Alternative A: Paying the whole amount at the end. Alternative B: Paying the interest at an annual basis while the total principal is paid at the end. tiv C
As gyms are getting crowded by the day, you decided to invest in your own home-garage gym to squeeze in your daily pump. For this purpose, you decided to go for a 10,000$ bank loan at an interest rate of 10% for a 3 years duration. The bank suggested 3 main payment alternatives that you can choose from: Alternative A: Paying the whole amount at the end. Alternative B: Paying the interest at an annual basis while the total principal is paid at the end. tiv C
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 3PA: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...
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Transcribed Image Text:As gyms are getting crowded by the day, you decided
to invest in your own home-garage gym to squeeze in
your daily pump. For this purpose, you decided to go
for a 10,000$ bank loan at an interest rate of 10% for a
3 years duration.
The bank suggested 3 main payment alternatives that
you can choose from:
Alternative A: Paying the whole amount at the end.
Alternative B: Paying the interest at an annual basis
while the total principal is paid at the end.
Alternative C: Paying interest + a portion of principal
annually.
In an excel spreadsheet, create a detailed payment plan
for each of the 3 alternatives following the template
below.
Year Owed interest Total owed interest End of year payment Total owed after payment
0
1
23
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