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Principal of the compound interest loan

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Reference no: EM132381069

1. $4,500 at 18% for 5 years

True interest rate cost of this loan 28.88% or 29%

a. Monthly payment be- $114.27

b. Amount of interest be- $2356.20

Suppose that you are only allowed to make a balloon payment to the principal of the compound interest loan. You have $1,000 to put down at the beginning of year 3. How many payments will you save?

Reference no: EM132381069

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