Question

If you take out a loan of $100,00 at a rate of 3%. How long will it take before the principal amount owed falls below $50,000 if you make payments of $1,000 each year?

Answer 1

Amortization Table:

Assuming 10000 Paid each year, If you assume 1000 it will be never fall below 50k.

If you pay Instalment 1000 and Int is 3000, All amount paid is adjusted against int, Principal amount remains continue.

Hence assuming

Principal = 100000

Instalment = 10000

After 7 Years, Principal amount falls below 50K