Time Value of Money
The $402.11 annual payment includes both interest and principal. Interest in the first year is calculated as follows: 1st year interest = i ( beginning balance = 0.1 ( $1,000 = $100. The repayment of principal is the difference between the $402.11 annual payment and the interest payment: 1st year principal repayment = $402.11 - $100 = $302.11. ................
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