2009-05-12_015804_BankRate - 5 30000 7.50% 2250 32250 Total...

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Note: It is assumed that John will pay $30000 toward principle payment each year. Also the payment made Option 1 Year Beg Amount Interest Rate Interest amount Ending Amount 1 150000 6.00% 9000 159000 2 120000 7.00% 8400 128400 3 90000 8.00% 7200 97200 4 60000 9.00% 5400 65400 5 30000 10.00% 3000 33000 Total Payments Option 2 Year Beg Amount Interest Rate Interest amount Ending Amount 1 150000 7.50% 11250 161250 2 120000 7.50% 9000 129000 3 90000 7.50% 6750 96750 4 60000 7.50% 4500 64500
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Unformatted text preview: 5 30000 7.50% 2250 32250 Total Payments Since Total payment are less in option 1 hence option 1 is better. e each year would be Prinicple Payment plus Interest accrued during the year Payment made Balance Remaining 39000 120000 38400 90000 37200 60000 35400 30000 33000 183000 Payment made Balance Remaining 41250 120000 39000 90000 36750 60000 34500 30000 32250 183750...
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2009-05-12_015804_BankRate - 5 30000 7.50% 2250 32250 Total...

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