Posted: September 13th, 2017

Pearland Medical Center has just borrowed $1,000,000 on a five-year loan with annual payment term at a 12 percent rate. The first payment will be due one year from now.

Pearland Medical Center has just borrowed $1,000,000 on a five-year loan with annual payment term at a 12 percent rate. The first payment will be due one year from now.

1. Construct the amortization schedule for this loan.

2. How do the interest payment, principal payment, and total payment change when a loan is amortized?

3. After reading Franklins article Tight Capital Markets Impact on Hospitals, discuss how the issues in the non-profit (tax-exempt) borrowing market in 2008 and 2009 encouraged consolidation in the health care industry through mergers and acquisitions.