Question: course theory of interest chapter amortization and sinking funds...
Course - Theory of Interest (Chapter: Amortization and Sinking Funds)
This is a Multi-Part Question
A loan of $3,000 at 18% per year is being re-paid by 10 equal annual payments, the first payment due 1 year after the loan is made.
a) Determine how much the interest portion of the 6th payment is. Answer: $375.75
b) At the time of the 4th payment and additional payment of $100 is made and the loan is refinanced at 11% per year for the remainder of its life. What's the new payment? Answer: $528.26