Question

You borrow ​$300,000 to buy a house over a 15​-year term. The loan is structured as an amortized loan with annual payments and an interest rate of 10​%. Find the information for the amortization schedule for years 1 and 2. Payment​ ($) Interest in Payment​ ($) Principal Repaid​ ($) Principal Owing at End of Year​ ($)

Answer 1

The required amortization table will be prepared as follows:

	A	B	C	D	E
1	Year	Payment	Interest in payment	Principal repaid	Principal owing at end of year
2	0				300000.00
3	1	39442.13	30000.00	9442.13	290557.87
4	2	39442.13	29055.79	10386.35	280171.52

Answers for Year 1 are in yellow and answers for Year 2 are in green.

Note:

Above figures have been calculated in the following manner:

Year	Payment	Interest in payment	Principal repaid	Principal owing at end of year
0				300000
1	=PMT(10%,15,-300000,0,0)	=E2*10%	=B3-C3	=E2-D3
2	=PMT(10%,15,-300000,0,0)	=E3*10%	=B4-C4	=E3-D4