FIN 534 RANK Change The World /fin534rank.com FIN 534 RANK Change The World /fin534rank.com | Page 51

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Week 2 discussion 2
From the e-Activity, determine if the company you analyzed would be a
good investment for you or not. Provide specific examples to support
your response.
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FIN 534 Week 3 Chapter 4 Solution
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A $50,000 loan is to be amortized over 7 years, with annual end-of-year
payments. Which of these statements is CORRECT?
a. The annual payments would be larger if the interest rate were lower.
b. If the loan were amortized over 10 years rather than 7 years, and if the
interest rate were the same in either case, the first payment would
include more dollars of interest under the 7-year amortization plan.
c. The proportion of each payment that represents interest as opposed to
repayment of principal would be lower if the interest rate were lower.
d. The last payment would have a higher proportion of interest than the
first payment.