Question 1: You borrow $60,000. This loan will be paid back over five years, with payments made at the end of each year. The interest rate charged on the loan is 9%.
A) What is the balance of the loan at the end of year one?
B) How much interest was paid in year three?
Question 2: You are thinking about buying a car, and your local bank lend you $25,000. The loan will be fully amortized over 6 years. The nominal interest rate will be 4%, with monthly payments.
Over the life of the loan, how much interest will you have paid?
Appreciate any help!