Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. a. you get a $10,000 loan from your bank for 3 yea

A. You get a $10,000 loan from your bank for 3 years with 8% interest...

50.1K

Verified Solution

Question

Finance

A. You get a $10,000 loan from your bank for 3 years with 8% interest rate per year. You make 3 equal payments to repay your loan (amortized repayment). Complete the following table which shows the amortization schedule.
Amortization schedule
year
Beginning Balance
Annual Payment
Interest Expense
Balance Reduction
End Balance
$10,000
$0.00
B. In the previous question, lets assume in the beginning of the 3rd year (right after making the 2nd payment) you have the option to refinance your loan for the remaining one year with a lower rate, 5%. However, you have to pay $150 in administrative fees to do the refinancing. Would you refinance? (For simplicity assume that you will pay the administrative fee at the end of the year)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Physics
1.2K views

At a steam power plant, steam engines work in pairs, the heat output of the first...

Biology
1.2K views

The Executive Order of the Constitution is Article O H O III

Basic Math
1.2K views

1 1 lb of potatoes cost 8 38 How much would it cost to buy...

Basic Math
1.2K views

The positions on a lacrosse team are called defenders (D), midfielders (M), and attackers (A)....

Calculus
1.2K views

If f(x) = x + 3x + 4x + 5 and g(x) = 5, then...

Accounting
1.2K views

Question#01: On January 1,2013, THD Company purchased 12% bonds having a maturity value...

Accounting
1.2K views

Required information The following information applies to the questions displayed below) year's operations follow Chuck...

Accounting
1.2K views

Cost-volume-profit analysis Required a. Calculate the weighted average contribution margin. b. Compute the...

Accounting
1.2K views

Calculate the current ratio and the debt ratio for 2011, 2012, and 2013. How is...

Accounting
1.2K views

Ken Gorman is a maitre d' at Carmel Dinner Club. On February 1, 20-- his...

Accounting
1.2K views

Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Inc., has...

Accounting
1.2K views

Assuming yourself as a management consultant, explain as to why an entrepreneur should prepare a...