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On January 1, 2013 the Minton Company borrowed $162,000 cash from Hometown Bank by issuing a five-year 8% term note. The principal and interest are repaid by making annual payments beginning on December 31, 2013. The annual payment on the loan based on the present value of annuity factor would be $40,575. The amount of principal repayment included in the December 31, 2013 payment is: Solution Principal repayment = 40575 - 162000*.08 = 27615 Correct option: $27,615. .

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- On January 1, 2013 the Minton Company borrowed $162,000 cash from Hometown Bank by issuing a five-year 8% term note. The principal and interest are repaid by making annual payments beginning on December 31, 2013. The annual payment on the loan based on the present value of annuity factor would be $40,575. The amount of principal repayment included in the December 31, 2013 payment is: $12,960. $27,615. $37,329. $40,575. Solution Principal repayment = 40575 - 162000*.08 = 27615 Correct option: $27,615.

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