Your firm has taken out a $489,000 loan with 8.9% APR (compounded monthly) for some commercial property. As is common in commercial real estate, the loan is a 5-year loan based on a 15-year amortization. This means that your loan payments will be calculated as if you will take 15 years to pay off the loan, but you actually must do so in 5 years. To do this, you will make 59 equal payments based on the 15-year amortization schedule and then make a final 60th payment to pay the remaining balance.
1. What will your monthly payments be?
The monthly payment will be $____?
2. What will your final payment be?
The final payment will be $____?