7. John and Mary Landlord want to purchase 200 acres of farm land valued at $2,000...

7. John and Mary Landlord want to purchase 200 acres of farm land valued at $2,000 per acre. Their lender requires a 20% down payment. Assume twenty annual payments. The interest rate is 7.0%. [USPV.07,20=10.5940]

a. Calculate the schedule of interest and principal payment over the life of the loan using the constant payment method and the constant payment on principal method. Show your answer using a table. If you choose to use an excel spreadsheet then you need to submit that too. (20 points)

b. What is the total interest paid over the life of the loan with each method?

Solutions

Expert Solution

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

jeff jeffy answered 1 year ago

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