1. Katie Couric's company borrowed $100,000 from the bank at 8% interest compounded quarterly in order to put in a pool for the senior management team and boost morale. If the bank wants to be paid back in monthly payments over 6 years...
How much is each monthly payment ($ amount)?
What percentage of each payment goes toward Interest for payment 1, 2, and 3 (different % for each payment)?
2. Say in the previous example the loan was to be paid back 50 years not 6 years. How much would still be owing on the loan after 25.5 years (i.e. after 306 payments)? (use the short cut described in the book and lecture - do not use a table for this unless you want to double check your answer with a spreadsheet)