How much total interest is paid over the life of the loan

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Q1) Give an amortization schedule for a three-year loan of $114,000. The interest rate is 11 percent per year, and the loan calls for equal annual payments. How much total interest is paid over the life of the loan?

Q2) Suppose 2 athletes sign 10-year contracts for $80 million. In one case, we're told that the $80 million will be paid in 10 equal instalments. In the other case, we're told that the $80 million will be paid in 10 instalments, but the instalments will increase by 5% per year. Who got a better deal and why?

Reference no: EM132825094

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