On January 1, 2015, Bratios Company purchases equipment and signs a 6-year mortgage note for $80,000 at 15%. The note will be paid in equal annual installments of $21,139, beginning January 1, 2016. Calculate the portion of principal amount paid on the third installment.

Question

Quizplus · Accepted Answer

The third installment includes both interest and principal. The interest for the third year is calculated on the remaining principal after the first two installments. The principal portion of the third installment is $12,086.

On January 1, 2015, Bratios Company Purchases Equipment and Signs