Basics of Engineering Economy 2nd Edition by Anthony Tarquin,Leland Blank

Exercise 5

General Dynamics obtained a 0.5%-per-month $100 million loan to be repaid over a 5-year period. ( a ) at is the difference in the amount of interest in the second month's payment if interest is charged on the original principal of the loan rather than on the unrecovered balance ( b ) months pass, for which basis-principal only or unrecovered balance-does the monthly interest decrease in amount