Mainline Sports has just acquired a new business van at a cash price of $70,000. Unfortunately, Mainline only had $10,000 available and had to finance the balance with the dealer over 5years at 9%. The sales contract calls for Mainline to make 5 equal annual year-end payments to retire the debt.
a. What is the amount of each payment?
b. What is Mainline's interest expense for year 2? Prepare anamortization table.
c. What is Mainline's total interest cost over the 5-year term ofthe loan?