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On January 1, Year 1, Mahoney Company borrowed $324,000 cash from Sun Bank by issuing a 5-year, 8% term note. The principal and interest are repaid by making annual payments beginning on December 31, Year 1. The annual payment on the loan equals $81,150.

-What is the amount of principal repayment included in the payment made on December 31,Year 1?
A)$25,920
B)$81,150
C)$74,658
D)$55,230

Question

[The following information applies to the questions displayed below.]

On January 1, Year 1, Mahoney Company borrowed $324,000 cash from Sun Bank by issuing a 5-year, 8% term note. The principal and interest are repaid by making annual payments beginning on December 31, Year 1. The annual payment on the loan equals $81,150.

-What is the amount of principal repayment included in the payment made on December 31,Year 1?
A)$25,920
B)$81,150
C)$74,658
D)$55,230

Quizplus · Accepted Answer

The Answer is D

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