What is the annual loan amount

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Reference no: EM132061076

Suppose, an asset worth $ 1.8 million was financed using a debt ratio of 0.75, 10-year, annually amortizing loan @10% contract rate.

What is the loan amount?

What is the annual loan amount?

The loan will be pre-paid at the end of the 5th year, when the asset is sold. What will be the outstanding loan payment to the lender at the time of sale (including the loan balance and the fifth year's annual payment)? Consider no pre-payment penalty.

Reference no: EM132061076

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