ESTION 16 ou borrow 8000 at an annual interest rate of 6 to

ESTION 16 ou borrow $8000 at an annual interest rate of 6% to be repaid in 4 equal annual installments. Your ending balance at the end of period 2 will be qual to approximately O a, 2178 O b. 4133 O d. none of the above QUESTION 17 You borrow $8000 at an annual interest rate of 6% to be repaid in 4 equal annual installments. If you want to repay the who;e period 2, then your payment will be equal to approximately O a. 4233 b 6171 c. 4000 Od none of the above QUESTION 18

Solution

16.

Balance remaining = 4233 so none of the above

17.

refer above table

payment = 4233

Year	Beg Balance	Total Pmt	Interest	Principal Paid	End Balance
1	8,000	2,308.73	480.00	1,828.73	6,171.27
2	6,171	2,308.73	370.28	1,938.46	4,232.81
3	4,233	2,308.73	253.97	2,054.76	2,178.05
4	2,178	2,308.73	130.68	2,178.05	0.00