Solutions to Chapter 1
Using a financial calculator, enter: PV = (-)80,000, n = 20 ( 12 = 240 months ... the FV of an ordinary annuity times (1 + r). Because each cash flow comes at the beginning of the period, it has an extra period to earn interest compared to an ordinary annuity. ... Time Loan balance Year-end interest due Year-end payment Amortization of loan 0 ... ................
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