Question 1. A three-year, 6%, $42,000 note payable is issued on January 1. Terms include fixed annual principal payments of $14,000, plus interest on the outstanding balance at the end of each year. How much is the total interest expense over the life of the note payable?
a) $5,040
b) $210
c) $1,260
d) $2,520
Question 2. On March 1, Brutto Corp. issues a 3 year, 5%, $60,000 note payable. The terms of the note include monthly blended principal and interest payments of $1,799. How much would be the remaining balance of the principal after the first blended payment?
a) $58,201
b) $57,000
c) $58,451
d) $55,201