Your company has just taken out a 1-year installment loan for $72,500 at a nominal rate of 20.0% but with equal end-of-month payments. What percentage of the 2nd monthly payment will go toward the repayment of principal? O a. 71.70% O b. 86.7196 O c. 83.3796 O d. 97.5596 O e. 101.72%

Your company has just taken out a 1-year installment loan for $72,500 at a nominal rate of 20.0% but with equal end-of-month payments. What percentage of the 2nd monthly payment will go toward the repayment of principal? O a. 71.70% O b. 86.7196 O c. 83.3796 O d. 97.5596 O e. 101.72%

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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Question

Your company has just taken out a 1-year installment loan for $72,500 at a nominal rate of 20.0% but with equal end-of-month payments. What percentage of the
2nd monthly payment will go toward the repayment of principal?
a. 71.70%
b. 86.71%
O
c. 83.37%
O d. 97.55%
e. 101.72%

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