Identify the interest only loan payment plan

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Professor Willis Corporation (PWC) needs to bring in additional money to support future ventures. The President of the company has determined that they need to expand and build a new location that will double their capacity size. After talking to a local contractor, PWC needs $1,500,000 to build the second location. The contractor has said that PWC can pay for the expansion when the building is complete in 4 years. PWC utilizes Willis Banking that will offer them a loan to pay for the entire $1.5M at an interest rate of 14% over the term of 4 years.

Question 1) Assuming Willis Banking approves us for a $1.5M Future Value loan at the end of the 4-year term, what is the present value amount that they'd provide us with today?

Question 2) Using the information above, identify the interest only loan payment plan with the assumption that no payments are made over the 4-year lifespan.

Question 3) Using the information above, build the Amortized Loan payment plan.

Reference no: EM132489751

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