On October 1st, Silva bought a car for $60,000. He paid $10,000 in cash at the time of the purchase and agreed to pay the balance in five equal annual installments that include both the principal and 12 percent interest on the declining balance.
Required:
a Determine the amount of the annual payment.
a Determine the total dollars of interest that Silva will pay for this loan.
b Determine the amount of interest that is included in the first payment. It is not necessary to complete an amortization schedule.