ANSWER
Rate =5.6%
Number of years =5
PV of Loan =PMT*((1-(1+r)^-n)/r =5400*((1-(1+5.6%)^-5)/5.6%)
=22996.4387
a)
Pay off at end of 1 year =PV*(1+r)^n-PMT*(1+r)^n
=22996.4387*(1+5.6%)-5400 =18884.24
b)
Pay off at end of 4 years =PV*(1+r)^n-PMT*((1+r)^n-1)/r =22996.4387*(1+5.6%)^4-5400*((1+5.6%)^4-1)/5.6%) =5113.64
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