You are making equal annual payments on a 5-year, 9% loan of $80,000. How much total...

Question

Question

You are making equal annual payments on a 5-year, 9% loan of $80,000. How much total interest will be paid over the entire 5-year life of the loan? Please answer using a financial calculator!

Answer 1

Answer #1

Please find below the solution..

we have to use financial calculator to compute Annual installment first
Put in calculator
PV		80000
FV		0
I		9.00%
N		5

compute PMT		($20,567.40)
annual installment =		$20,567.40
total payment = 20567.4*5		$102,836.98
Interest = 102836.98-80000		$22,836.98

Answer 2

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