Time value of money

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Time value of Money (Including Amortization)

Lenny Davis purchased a new house for $250,000. He paid $30,000 down and agreed to pay the rest over the next 25 years in 25 equal annual payments that included principal payments plus 10 per cent compound interest on the unpaid balance.

1. What will be the equal annual payments?

2. Complete the amortization schedule for the first two years.

3. What percentage of the second year's payment is interest?

4. What would be the payment if Leonardo agreed to make monthly payments, starting immediately?

5. Complete the amortization schedule for the first two months.

Reference no: EM133305483

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