Fenlisse owes 600,000 at the start of the year on a loan at an annual rate of 4.5 %; at year-end it pays an annuity of 115,000 covering the year’s interest and part of the capital. Interest paid is classified as operating under its policy (case data). Determine the operating and financing parts of the annuity.
- Principal owed at the start
- 600,000
- Annual interest rate
- 4.5 %
- Annuity paid
- 115,000