please given alll parts solution 3.Lionel Cooper paid for new mechanic's tool with an installment loan of $6,000.00 at 8% for 36months with a payment of $187.80. After 20 payments, the balance is $2,849.08. He pays off theloan when the next payment is due.a. What is the current month's interest?b. What is the final payment?c. How much is saved by paying the loan off early?

Loans are paid by equal monthly installments and these monthly payments carry the payment for…

Answered: Lionel Cooper paid for new mechanic's…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank in the amount of $500,000. The terms of the loan are 2.9% annual interest rate and payable in 8 months. Interest is due in equal payments each month. Compute the interest expense due each month. Show the journal entry to recognize the interest payment on October 20, and the entry for payment of the short-term note and final interest payment on May 20. Round to the nearest cent if required.
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