A farmer is considering borrowing money from a bank. Given the following information: Initial loan amount...

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A farmer is considering borrowing money from a bank. Given thefollowing information: Initial loan amount is $88,000. The loanwill be fully amortized in 3 years at 12%. Marginal tax rate is20%. (i) What is the interest payment in the 1st year? a.$12,672.00 b. $13,200.00 c. $10,560.00 d. None of the answers arecorrect ENTER RESPONSE HERE: (ii) What is the principal payment inthe 1st year? a. $20,862.97 b. $20,041.13 c. $4,400.00 d.$26,078.71 ENTER RESPONSE HERE: (iii) What is the loan balance atthe end of 1st year? a. $83,600.00 b. $67,137.03 c. $67,958.87 d.$61,921.29 ENTER RESPONSE HERE: (iv) What is the tax saving in the1st year? a. $2,640.00 b. $2,112.00 c. $1,689.60 d. None of theanswers are correct ENTER RESPONSE HERE:

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A farmer is considering borrowing money from a bank. Given thefollowing information: Initial loan amount is $88,000. The loanwill be fully amortized in 3 years at 12%. Marginal tax rate is20%. (i) What is the interest payment in the 1st year? a.$12,672.00 b. $13,200.00 c. $10,560.00 d. None of the answers arecorrect ENTER RESPONSE HERE: (ii) What is the principal payment inthe 1st year? a. $20,862.97 b. $20,041.13 c. $4,400.00 d.$26,078.71 ENTER RESPONSE HERE: (iii) What is the loan balance atthe end of 1st year? a. $83,600.00 b. $67,137.03 c. $67,958.87 d.$61,921.29 ENTER RESPONSE HERE: (iv) What is the tax saving in the1st year? a. $2,640.00 b. $2,112.00 c. $1,689.60 d. None of theanswers are correct ENTER RESPONSE HERE: