2. CTL (Concrete Testing Lab) borrowed $100,000 for new equipment at 12% per yea

Question

2. CTL (Concrete Testing Lab) borrowed $100,000 for new equipment at 12% per year, compounded quarterly. It is to be paid back over three years in equal quarterly payments quarterly a. How much are the quarterly payments? b. How much interest is in the 7th payment c. How much principal is in the 7th payment? d. What is the remaining balance after the 7th payment? e. Two years after borrowing the money, you decide to pay off the loan. You have not yet made the payment due at that time. What is the payoff amount for the loan?

Explanation / Answer

Req a: Amount borrowed 100000 Annual Interest rate 12% Quarterly Interest rate (12*3/12) 3% Annuity PVf for 12 periods at 3% 9.954 Quarterly payment to be made 10046 (100000/9.954) Req b: Amort Chart S.no. Payment Interest Principal Outstanding paid Amount Balance 0 100000 1 10046 3000 7046 92954 2 10046 2789 7257 85697 3 10046 2571 7475 78222 4 10046 2347 7699 70523 5 10046 2116 7930 62593 6 10046 1878 8168 54425 7 10046 1633 8413 46012 8 10046 1380 8666 37346 Interest in 7th payment: $ 1633 Req c: Principal amount in 7th payment: $ 8413. Req d: Remaining balance in7th payment: $ 46012 Req e: To payoff the loan, the amount to be repaid is $ 37346

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.