A 10 year loan of $2,000 is repaid with payments the end of each year. There are 2 options: (i) Equal annual payments at an annual effective rate of 8.07%; (ii) Repayments of the principal of $200 each year plus interest on the outstanding balance at an effective rate of i%. The sum of all payments under each option is the same. What is i?

1) A 20-year loan of $1,100 at an effective annual interest rate of 7% is repaid with payments at the end of each year. Each of the first ten payments equals 150% of the amount of interest due. Immediately after the tenth payment, you take out a 10 year loan with payments $100 at the end of each year and effective annual interest rate of i and use this loan to pay off your original loan. Find i.

3. A loan of $50,000 due in one year is to be repaid by three equal payments due today, six months from now, and one year from now. What is the amount of the equal payments if interest is 6.5% (simple interest) and the focal date is today?

3. Complete an amortization schedule for a $38,000 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 7% compounded annually. If an amount is zero, enter "0". Do not round intermediate calculations. Round your answers to the nearest cent. Beginning Balance $ % Interest Year 1 2 3 ɔ. What percentage of the payment represents interest and what percentage represents principal for each of the 3 years? Do not round intermediate calculations. Round your answers to two decimal places. % Principal Payment $ % % % % Interest $ % Repayment. of Principal $ Year 1: Year 2: Year 3: % Why do these percentages change over time? I. These percentages change over time because even though the total payment is constant the amount of interest paid each year is declining as the remaining or outstanding balance declines. Remaining Balance $ II. These percentages change over time because even though the total payment is constant the amount of interest paid…