Question

1. Complete an amortization schedule for a $28,000 loan to be repaid in equal installments at the end of each of the next three years. The interest rate is 10% compounded annually. If an amount is zero, enter "0". Do not round intermediate calculations. Round your answers to the nearest cent.

   	Beginning			Repayment	Ending
   Year	Balance	Payment	Interest	of Principal	Balance
   1	$	$	$	$	$
   2
   3

2. What percentage of the payment represents interest and what percentage represents principal for each of the three years? Do not round intermediate calculations. Round your answers to two decimal places.

   	% Interest	% Principal
   Year 1:	%	%
   Year 2:	%	%
   Year 3:	%	%

   Why do these percentages change over time?

Answer 1