Question

a. Complete an amortization schedule for a $13,000 loan to be repaid in equal installments at the end of each of the next three years. The interest rate is 12% compounded annually. Round all answers to the nearest cent.

Beginning | Repayment | Ending | |||

Year | Balance | Payment | Interest | of Principal | Balance |

1 | $ | $ | $ | $ | $ |

2 | $ | $ | $ | $ | $ |

3 | $ | $ | $ | $ | $ |

b. What percentage of the payment represents interest and what percentage represents principal for each of the three years? Round all answers to two decimal places.

% Interest | % Principal | |

Year 1: | % | % |

Year 2: | % | % |

Year 3: | % | % |

c. Why do these percentages change over time?

- These percentages change over time because even though the total payment is constant the amount of interest paid each year is declining as the remaining or outstanding balance declines.
- These percentages change over time because even though the total payment is constant the amount of interest paid each year is increasing as the remaining or outstanding balance declines.
- These percentages change over time because even though the total payment is constant the amount of interest paid each year is declining as the remaining or outstanding balance increases.
- These percentages change over time because even though the total payment is constant the amount of interest paid each year is increasing as the remaining or outstanding balance increases.
- These percentages do not change over time; interest and principal are each a constant percentage of the total payment.

_____IIIIIIIVV

Answer #1

1.

Payment | Loan beginning balance | Payment | Interest payment | Principal payment | Loan ending balance |

1 | 13000 | $5,412.54 | $1,560.00 | $3,852.54 | $9,147.46 |

2 | $9,147.46 | $5,412.54 | $1,097.70 | $4,314.84 | $4,832.62 |

3 | $4,832.62 | $5,412.54 | $579.91 | $4,832.62 | $0.00 |

2.

Year | Interest | Principal |

1 | 28.822% | 71.178% |

2 | 20.281% | 79.719% |

3 | 10.714% | 89.286% |

3.

These percentages change over time because even though the total payment is constant the amount of interest paid each year is declining as the remaining or outstanding balance declines.

Complete an amortization schedule for a $25,000 loan to be
repaid in equal installments at the end of each of the next three
years. The interest rate is 11% compounded annually. Round all
answers to the nearest cent.
Beginning
Repayment
Ending
Year
Balance
Payment
Interest
of Principal
Balance
1
$
$
$
$
$
2
$
$
$
$
$
3
$
$
$
$
$
b. What percentage of the payment represents interest and what
percentage represents principal for...

a. 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 12% compounded annually. Round all
answers to the nearest cent.
Beginning
Repayment
Ending
Year
Balance
Payment
Interest
of Principal
Balance
1
$
$
$
$
$
2
$
$
$
$
$
3
$
$
$
$
$
b. What percentage of the payment represents interest and what
percentage represents principal...

a. Complete an amortization schedule for a $40,000 loan to be
repaid in equal installments at the end of each of the next three
years. The interest rate is 11% compounded annually. Round all
answers to the nearest cent.
Beginning
Repayment
Ending
Year
Balance
Payment
Interest
of Principal
Balance
1
$
$
$
$
$
2
$
$
$
$
$
3
$
$
$
$
$
b. What percentage of the payment represents interest and what
percentage represents principal...

A) Complete an amortization schedule for a $14,000 loan to be
repaid in equal installments at the end of each of the next three
years. The interest rate is 7% compounded annually. If an amount is
zero, enter "0". Do not round intermediate calculations. Round your
answers to the nearest cent.
B) 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...

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repaid in equal installments at the end of each of the next 3
years. The interest rate is 8% compounded annually. If an amount is
zero, enter "0". Do not round intermediate calculations. Round your
answers to the nearest cent.
Beginning
Repayment
Remaining
Year
Balance
Payment
Interest
of Principal
Balance
1
$
$
$
$
$
2
3
What percentage...

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repaid in equal installments at the end of each of the next 3
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
Remaining
Year
Balance
Payment
Interest
of Principal
Balance
1
$
$
$
$
$
2
3
What percentage...

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repaid in equal installments at the end of each of the next 3
years. The interest rate is 6% compounded annually. If an amount is
zero, enter "0". Do not round intermediate calculations. Round your
answers to the nearest cent.
Beginning
Repayment
Remaining
Year
Balance
Payment
Interest
of Principal
Balance
1
$
$
$
$
$
2
3
What percentage...

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repaid in equal installments at the end of each of the next three
years. The interest rate is 9% 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
What percentage...

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repaid in equal installments at the end of each of the next three
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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
What percentage...

8)
Complete an amortization schedule for a $43,000 loan to be
repaid in equal installments at the end of each of the next 3
years. The interest rate is 8% compounded annually. If an amount is
zero, enter "0". Do not round intermediate calculations. Round your
answers to the nearest cent.
Beginning
Repayment
Remaining
Year
Balance
Payment
Interest
of Principal
Balance
1
$
$
$
$
$
2
3
What...

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