Answer:
The amount that would be reduce for the first year is $2,531.49
Explanation:
Hi, first we have to find the amount of the equal installments to be paid for the next 5 years, for that, we need to solve for "A" the following equation.

Where:
Present Value = the borrowed amount
A = equal installments
r = rate of the loan
n = number of periodic and equal installments
Everything should look like this.


Therefore, A= $3,806.49
Now, in order to find the amount that would be reduced in the first year, we have to use the following formula.

So, it should look like this.


Best of luck.