Harriet Corp borrowed $200,000 from the first state bank. The note issued by Har

Q: Harriet Corp borrowed $200,000 from the first state bank. The note issued by Har

Interest expense for the first year=$200,000*8% =$16000 Hence prinicpal reduction for the first year=(29806-16000)=$13806 Hence principal balance after the first year=(200,000-13806)=$186194 Hence interest expense for the second year=$186194*0.08 =$14895.52

ID: 2407147 • Letter: H

Question

Harriet Corp borrowed $200,000 from the first state bank. The note issued by Harriet carried an interest rate of 8% fixed, and interest. If the annual installments of principal and interest. If the annual payments are $29,806 , what is the interest expense for: a) the first year and b) the second year?

Harriet Corp borrowed $200,000 from the first state bank. The note issued by Harriet carried an interest rate of 8% fixed, and interest. If the annual installments of principal and interest. If the annual payments are $29,806 , what is the interest expense for: a) the first year and b) the second year?

Explanation / Answer

Interest expense for the first year=$200,000*8%

=$16000

Hence prinicpal reduction for the first year=(29806-16000)=$13806

Hence principal balance after the first year=(200,000-13806)=$186194

Hence interest expense for the second year=$186194*0.08

=$14895.52

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Harriet Corp borrowed $200,000 from the first state bank. The note issued by Har

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