The Maid of the Mist Corporation (MMC) has secured a bank loan to upgrade their fleet and purchase a new boat (the Maid of the Mist VI). The loan terms allow the MMC to defer payments, including interest, for six months and to make 36 end-of-the-month payments thereafter. MMC borrowed $1,600,000 and the loan had an interest rate of 11% compounded monthly.
a. What is the amount of the monthly payment if MMC repays the loan in equal monthly payments?
b. Consider the 14th payment specifically. How much will MMC pay toward interest and principal?
c. What is the total amount of interest that MMC will pay over the life of the loan?