John's Auto Repair just obtained an interest-only loan of $35,000 with annual payments for 10 years and an interest rate of 8 percent. What is the amount of the loan payment in Year 8?

Question

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The payment for an interest-only loan is calculated by multiplying the principal amount by the interest rate. Therefore, the annual payment is $35,000 * 0.08 = $2,800. This payment remains constant throughout the loan term, including Year 8.

John's Auto Repair Just Obtained an Interest-Only Loan of $35,000