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Your bank is willing to finance an equipment purchase costing $800,000. The terms of the loan are that you will make a 20% down payment ($160,000) and the bank will lend you the remaining $640,000 at a rate of interest of prime + 3½%. Currently, prime rate of interest is 4.50%. The loan will be repaid over a five-year period in five equal installments due at the end of each of the next 5 years. Create an amortization table that breaks down the annual payment into interest and principal payments as well as showing the Balance of the loan each year.

Financial Management, Finance

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