9) You have a choice among three types of loan and wish to pay the LEAST total cash flows. An amortized loan will result in fewer dollars paid out than a discount or an interest-only loan for the same amount, positive interest rate, and time period.

10) The first interest payment on a 5-year, 8%, $100,000, fully-amortized loan with annual payments will be less than the last interest payment.

11) The last interest payment on a 12-year, 6%, $138,000, fully-amortized loan with annual payments will be less than the first interest payment.

12) Once you begin making payments on an amortization schedule for a loan such as a mortgage or car loan, most contracts clearly state that you may NOT pay off the loan early.

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13) Complete the equal-payments three-year amortization table. YearBeginningPrincipalPaymentInterestExpensePrincipalReductionEndingPrincipal1$6,000.00$480.00$4,151.802$2,328.20$1,996.063$2,155.74

1) Edward wishes to save enough money to purchase a retirement lake cabin. He is willing to spend $500,000 for the cabin and he can save $25,000 per year and invest the money into an account earning 8.00% per year. If Edward's investments come in the form of equal annual end-of-the-year cash flows and the first cash flow is in exactly one year, how long will it take him to save enough money to buy the lake cabin?

2) Marie has a $1,000,000 investment portfolio and she wishes to spend $87,500 per year as an ordinary annuity. If the investment account earns 6% annually, how long will her portfolio last? Use a calculator to determine your answer.