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You are borrowing $100,000 at 5% interest EAR to be repaid over 20 years in equal...

You are borrowing $100,000 at 5% interest EAR to be repaid over 20 years in equal annual payments of blended principal and interest. Each payment is $8,024.26. Payments are to be made at the end of each of the next 20 years. What is the interest component of the 12th payment?
Select one:
a. $2,556.61
b. $3,298.77
c. $1,225.93
d. $2,851.75
e. None of the above

Solutions

Expert Solution

Information given are as follows :-

loan amount = 100,000

term = 20 years

5% interest

The loan repayment scedule is calculated as follows :-

The interest component of the 12th payment = 2851.75

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jeff jeffy answered 1 year ago
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