Repayment of principal, Financial Accounting

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a) Your company is planning to take $1,750,000 on a 3-year, 10%, annual payment, fully amortized term loan. What fraction of the payment made at the end of the second year will show repayment of principal?

 

b) It is now January 1. You plan to make a total of 5 deposits of $100 each, one each 6 months, with the first payment being made today. The bank pays a nominal interest rate of 8% but uses semi-annual compounding. You plan to leave the money in the bank for 15 years. How much will be in your account after 15 years?

 


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