Consider a project with an initial investment of $300,000, which must befinanced at an interest rate of l2% per year. Assuming that the required repayment period is six years, determine the repayment schedule by identifying the principal as well as the interest payments for each of the following repayment methods:(a) Equal repayment of the principal: $50,000 principal payment each year(b) Equal repayment of the interest: $36,000 interest payment each year(c) Equal annual installments: $72,968 each year
Consider a project with an initial investment of $300,000, which must befinanced at an interest rate of l2% per year. Assuming that the required repayment period is six years, determine the repayment schedule by identifying the principal as well as the interest payments for each of the following repayment methods:(a) Equal repayment of the principal: $50,000 principal payment each year(b) Equal repayment of the interest: $36,000 interest payment each year(c) Equal annual installments: $72,968 each year
Chapter4: Time Value Of Money
Section4.17: Amortized Loans
Problem 1ST
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Consider a project with an initial investment of $300,000, which must be
financed at an interest rate of l2% per year. Assuming that the required repayment period is six years, determine the repayment schedule by identifying the principal as well as the interest payments for each of the following repayment methods:
(a) Equal repayment of the principal: $50,000 principal payment each year
(b) Equal repayment of the interest: $36,000 interest payment each year
(c) Equal annual installments: $72,968 each year
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