Crazy Horse Construction purchased a new loader for $280,000 using a 25 annual e
ID: 1096258 • Letter: C
Question
Crazy Horse Construction purchased a new loader for $280,000 using a 25 annual end of year payment plan at 10% interest. At the end of 10 years they decided to refinance the loader with a new company with 15 year loan. They will pay of the balance due for the loader plus a penalty of 2% of the balance due for early payout of the loan. It will also cost them $1000 to originate the new loan. They will finish paying for the loader with the new loan for the remaining 15 years. Use an amortization table to determine the balance due at the end of 10 years and then calculate the payments for the new loan using an interest rate of 9% per year. The EXAXT answer is $29,813.54 , but i need to know how to get this EXACT answer in excell. Please show all work
Explanation / Answer
Interest factor for 25 years @10% 9.077 Annual Equal Payment=280000/9.077 30847 Payment schedule Year Interest Principal Balance 280000 1 28000 2847 277153 2 27715.28 3132 274021 3 27402.089 3445 270576 4 27057.578 3790 266786 5 26678.616 4169 262618 6 26261.758 4585 258032 7 25803.214 5044 252988 8 25298.816 5548 247440 9 24743.978 6103 241337 10 24133.656 6714 234623 Add 2% 4692 Add 1000 1000 Total 240315 Interest @9% Interest factor for 15years@9% 8.061 Annual Equal Payment=240315/8.061 29812.06