26-103 What is the principal outstanding on Tranche A and Tranche B after the end of year payment in the previous question?
A)$110 million on Tranche A and $90 million on Tranche B
B)$95 million on Tranche A and $90 million on Tranche B.
C)$106.8 million on Tranche A and $90 million on Tranche B.
D)$110 million on Tranche A and $86.8 million on Tranche B.
E)$108.4 million on Tranche A and $88.4 million on Tranche B.

Question

Quizplus · Accepted Answer

At the end of the first year, the scheduled annual payment of $17.6 million is made on both tranches. The principal payments are allocated based on the outstanding balance of each tranche:
- Tranche A: $100 million outstanding balance - $8.75 million principal payment = $91.25 million outstanding balance
- Tranche B: $95 million outstanding balance - $8.75 million principal payment = $86.25 million outstanding balance
Therefore, the total principal outstanding is $91.25 million on Tranche A and $86.25 million on Tranche B.

26-103 What Is the Principal Outstanding on Tranche a and Tranche