On January 1, Year 1, Brown Co. borrowed cash from First Bank by issuing a $112,000 face-value, four-year term note that had an 8 percent annual interest rate. The note is to be repaid by making annual cash payments of $33,815 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $64,000 cash per year.
Required:
Prepare an amortization schedule for the four-year period.
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Ответ:
$20,302.80
Explanation:
n = 6 i = 5%
Checking on the annuity table, the present value factor is 5.0757
Present value of the annuity = $4000 x 5.0757 = $20,302.80