You have borrowed 25,000.00 at an interest rate of 16%. Equalpayments will be ma
ID: 2770519 • Letter: Y
Question
You have borrowed 25,000.00 at an interest rate of 16%. Equalpayments will be made over a 3 year period. (the first payment willbe made at the end of the first year.) What will the annual paymentbe, and what will the interest payment be for the secondyear? Please show me the formulas/work. Thanks. You have borrowed 25,000.00 at an interest rate of 16%. Equalpayments will be made over a 3 year period. (the first payment willbe made at the end of the first year.) What will the annual paymentbe, and what will the interest payment be for the secondyear? Please show me the formulas/work. Thanks.Explanation / Answer
Amountborrowed $25,000
Interestrate 16%
Timeperiod 3 years
PVF-OA(3,16%) 2.2459
PaymentAmount $11,131.45
Total Payment in 1styear $11,131.45
1st yearInterest(25000*16%) 4,000.00
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Principal amount at the 1st yearended 7,131.45
--------------
Beginning balance in 2ndyear 17,868.55
(25000-7,131.45)
Interest in 2nd year
(17868.55*16%) 2,858.97
Year
Beginning Balance
Total Payment
Interest paid
Principal paid
Ending Balance
Year
Beginning Balance
Total Payment
Interest paid
Principal paid
Ending Balance
1 25000.00 11,131.45 4000.00 7,131.45 17,868.55 2 17868.55 11,131.45 2858.97 8,272.48 9,596.07 3 9596.07 11,131.45 1535.37 9,596.07 0.00Related Questions
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