1a. Calculate the balance due, principle payment, and interest payment for each period of a new car loan. the nominal interest is 8% per year, compound monthly. Payments are made monthly for 5 years. The original loan is for $27,000.
1b. On December 1, Anderson purchased a car for $25,000. He paid $7500 immediately and agreed to pay three additional payments of $8,000 each (which includes principle and interest) at the end of 1,2 and 3 years. Maintenance for the car is projected at $1,000 at the end of the first year and $2,000 at the end of each subsequent year. Anderson expects to sell the car at the end of the fourth year (after paying for the maintenance work) for $12,000. Using these facts, prepare a table of cash flows and draw the cash flow diagram.