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A homeowner borrows $1,000,000 on a mortgage loan, and the loan is to be repaid in 30 equal payments at the end of each of the next 30 years. The lender charges 9.75% on the balance at the beginning of each year. Calculate the PMT for this amortizing loan. What is the amount of interest expense in Year 4 and the beginning balance in Year 5?

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The expert examines loan amortization for mortgages.

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