Question

Amortization. Loan Consolidated Incorporated (LCI) is offering a special one-time package to reduce Custom Autos' outstanding bills to one easy-to-handle payment plan. LCI will pay off the current outstanding bills of $238,000 for Custom Autos if Custom Autos will make an annual payment to LCI at an interest rae of 11% over the next 5 years. a. What are the annual payments of the loan? b. What is the amortization schedule for this loan if Custom Autos wants to pay off the loan before the loan maturity in 5 years? c. When will the balance be half paid off? d. What is the total interest expense on the loan over the 5 years? a. What is the annual payment of the loan? $ (Round to the nearest cent.)

Answer 1

fx X -+B34*11% D34 A B C D Н Payment Beginning balance Total Payment Interest payment Principal payment 38,215.73 $ 42,419.46 $ 47,085.61 $ 52,265.02 $ 58,014.17$ 1 Ending balance 1 $ 2 $ 3 $ 4 $ 238,000.00 $ 64,395.73$ 199,784.27 $ 64,395.73$ 157,364.80 $ 64,395.73$ 110,279.20 $ 64,395.73$ 58,014.17 64,395.73 $ 26,180.00 $ 21,976.27 $ 17,310.13 $ 12,130.71 $ 6,381.56 $ 34 199,784.27 35 157,364.80 36 110,279.20 37 58,014.17 5 $ 38 39 $64,395.73 in 3rd year $ 83,978.67 40 а) 41 C 42 d)

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