You borrowed $45,000 at 4% annual interest rate that you must repay over 3 years. The...

You borrowed $45,000 at 4% annual interest rate that you must repay over 3 years. The loan is amortized into three-equal end-of-year payments.

(a) Calculate annual payment amount

(b) Prepare a loan amortization schedule

(c) If you make equal monthly payment for 36 months, calculate monthly payment amount and prepare a monthly loan amortization schedule

(d) How much is total interest charge for 3 years, if you make annual payment? How much is total interest charge for 36 months, if you make monthly payment? Do you pay more interest with annual payment or monthly payment? Why?

Expert Solution

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.

ekkarill92 answered 2 years ago

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