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What would be the interest payment in year three

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Question - A CSA want to take out a loan to purchase a new van for local produce box deliveries. They would take out $27,500 at an annual rate of 7% that would be fully amortized over 10 years.

(1) What would be the interest payment in year 3?

a. $1,348

b. $1,925

c. $1,637

d. $1,749

(2) What would be the remaining principal at the end of year 5?

a. $16,054

b. $15,846

c. $20,377

d. $2,609

(3) What is the tax savings from interest in year 5 if the marginal tax rate is 22%?

a. $314

b. $287

c. $324

d. $228

Reference no: EM133136872

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