27.Your bank offers to lend you $100,000 at an 8.5% annual interest rate to start your new business. The terms require you to amortize the loan with 10 equal end-of-year payments. How much interest would you be paying in Year 2

The amount of interest that you would be paying in Year 2 is $7,927.03.

Explanation:

To calculate this, we first calculate the annual required fixed payment using the formula for calculating loan amortization as follows:

P = (A * (r * (1 + r)^n)) / (((1+r)^n) - 1) (1)

Where,

P = Annual required fixed payment = ?

A = Loan amount = $100,000

r = interest rate = 8.5%, or 0.085

n = number of payment years = 10

Substituting all the figures into equation (1), we have:

P = (100,000 * (0.085 * (1 + 0.085)^10)) / (((1+0.085)^10) - 1)

P = $15,240.77

Therefore, we have:

Interest amount paid in year 1 =  Loan amount * interest rate = $100,000 * 8.5% = $8,500

Principal repaid in year 1 =  Annual required fixed payment - Interest amount paid in year 1 =  $15,240.77 - $8,500 = $6,740.77

Beginning loan balance in year 2 = Loan amount - Principal repaid in year 1 = $100,000 - $6,740.77 = $93,259.23

Interest amount paid in year 2 =  Beginning loan balance in year 2 * interest rate = $93,259.23 * 8.5% = $7,927.03

Therefore, the amount of interest that you would be paying in Year 2 is $7,927.03.

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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