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What is the outstanding loan balance at the end of 5 years

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1. Using the amortization method a person borrows $5000 at an effective rate of 8% per annum and agrees to repay the loan with payments at the end of each year. The first payment is $600 and each subsequent payment is 4% above the previous one, with a smaller payment at the end of the term.

(a) What is the outstanding loan balance at the end of 5 years?

(b) What is the principal and interest paid in the 5thpayment?

Reference no: EM132685116

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