Hi John. The question says that 8.5% loan is repayable as a bullet payment at the end of 8 years. So why do we deduct the interest payable of $170000 annually in our workings.?
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Reflator inc Dec 2005
8y ago#1If you take a loan then you always have to pay interest each year. Then at the end of the relevant period you have to repay the principal. The question specifically refers to the 'bullet payment' as being a repayment of the principal.
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