On July 1,Shady Creek Resort borrowed $250,000 cash by signing a 10-year,8% installment note requiring equal payments each June 30 of $37,258.What amount of principal will be included in the first annual payment?

A) $20,000
B) $37,258
C) $25,000
D) $232,742
E) $17,258

Question

Devin Bradley · Accepted Answer

Final Answer : E, Explanation :  The first annual payment includes interest and principal. The interest for the first year is 8% of $250,000, which is $20,000. Subtracting this interest from the total annual payment ($37,258 - $20,000) gives the principal portion of $17,258.

On July 1,Shady Creek Resort borrowed $250,000 cash by signing a 10-year,8% installment note requiring equal payments each June 30 of $37,258.What amount of principal will be included in the first annual payment?

A) $20,000
B) $37,258
C) $25,000
D) $232,742
E) $17,258

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Related questions

On July 1,Shady Creek Resort borrowed $250,000 cash by signing a 10-year,8% installment note requiring equal payments each June 30 of $37,258.What amount of principal will be included in the first annual payment?A) $20,000B) $37,258C) $25,000D) $232,742E) $17,258

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Learning Objectives

Learning Objectives

Related questions

On July 1,Shady Creek Resort borrowed $250,000 cash by signing a 10-year,8% installment note requiring equal payments each June 30 of $37,258.What amount of principal will be included in the first annual payment?

A) $20,000
B) $37,258
C) $25,000
D) $232,742
E) $17,258