Care is building their flagship facility-tabular method

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Fresenius Kidney Care is building their flagship facility, which includes a new state-of-the art dialysis clinic, in Buffalo’s Medical Campus. The cost for the new 20,000 ft2 facility is $10,225,000. Fresenius will pay for this upgrade with 10% of their internal capital (i.e. cash) and will finance the remaining 90% with a commercial installment loan. Fresenius will make quarterly payments on this loan for the next 15 years. The loan has a rate of 6% interest compounded quarterly.

(a) Using the tabular method, provide the details of the first six payments. Include in your answer the quarterly payment (An), interest payment (In), principal payment (Pn), and ending balance (Bn) for each payment. Provide a table of answers and show your work for each calculation type (i.e. must show at least one calculation for An, In, Pn, and Bn to demonstrate how you arrived at these answers.

(b) How much will Fresenius pay toward interest in the 27th payment? Directly calculate this amount – do not enumerate the entire loan schedule.

Reference no: EM131641031

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