Determine what total interest paid in year 3

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Ross Machine Company in Smithville, Tennessee is considering buying a "CNC Machining Center" for its machining department. The cost of the machine is $60,000. A down payment of $20,000 is required by the machine tool builder and the loan balance will be paid in 5 equal yearly payments. The machine tool builder expects Ross Machine Company to pay the interest on the unpaid balance with each of the payments. The machine builder charges an interest of 10% per year.Develop a loan repayment schedule for this loan . Then, total interest paid in year 3 is: (HINT amount of loan is $40,000)

Reference no: EM13245429

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