Question

You borrow ​\$300,000 to buy a house over a 15​-year term. The loan is structured as...

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​ (\$)

Homework Answers

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
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