Farmer Ty needs to finance a machinery purchase of $70,000. His lender requires a down payment of 25%. He will repay the loan in seven annual payments. The annual interest rate is 7%. The amortization factor for a 7-year, 7% loan is 0.18555. Assuming he repays the loan using the constant payment method, what will the outstanding balance on the loan be at the end of year four (approximately)? a. $32,997 b. $17,614 c. $46,434 d.

Farmer Ty needs to finance a machinery purchase of $70,000. His lender requires a down payment of 25%. He will repay the loan in seven annual payments. The annual interest rate is 7%. The amortization factor for a 7-year, 7% loan is 0.18555. Assuming he repays the loan using the constant payment method, what will the outstanding balance on the loan be at the end of year four (approximately)? a. $32,997 b. $17,614 c. $46,434 d.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 17P

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