Question

You are getting a six-month loan for new kitchen appliances, where the principal is $10,000 and monthly interest is 1%. The first payment will be made in a month from today. Find the equal monthly payment and complete the following amortization table. [15 pts] Period Beginning, Balance Total Amount, Interest Payment, Principal Payment , Ending Balance 1, 2, 3, 4, 5, 6

Answer #1

Solution:

Principal amount =$10,000

Interest rate =1%

Time = 6 months

You take out a 20-year loan in the amount of $450,000 at a 4
percent annual rate. The loan is to be paid off by equal monthly
installments over 20 years. Draw an amortization table showing the
beginning balance, total payment, principal repayment, interest
payment and ending balance for each month. How much is the total
interest payment for the first four months? (show only four months
on the table).

You borrow $10,000 on January 1 and agree to pay off the loan
with 10 annual end-of-year payments. Your annual effective interest
rate is 5%. Complete the loan amortization table shown below for
payment number 5 and payment number 6.
Payment number Payment Amount
Principal Interest Loan Balance After Payment
5
6

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 11% compounded annually. Round all
answers to the nearest cent.
Beginning
Repayment
Ending
Year
Balance
Payment
Interest
of Principal
Balance
1
$
$
$
$
$
2
$
$
$
$
$
3
$
$
$
$
$

An amortization table reports the amount of interest and
principal contained within each regularly scheduled payment used to
repay an amortized loan.
Example Amortization Schedule
Year
Beginning
Amount
Payment
Interest
Repayment of
Principal
Ending
Balance
1
2
3
Consider the amount of the interest payments included in each of
the payments of an amortized loan. Which of the following
statements regarding the pattern of the interest payments is
true?
The portion of the payment going toward interest is smaller in...

Chloe Colburn purchased home appliances for her new apartment.
Store allowed her to defer payments (interest is still being
charged even though payments are deferred) for six months and to
make 36 equal end-of-month payments thereafter. The original note
was for $15,000, with interest at 9% per annum compounded monthly.
After 26 monthly payments, Chloe considers getting a loan from the
bank to pay her debts in one lump sum. She would pay the bank $186
per month for the...

You plan to take a 30-year mortgage in the amount of $800,000 to
buy a home. The bank charges 5.5% annual interest compounded
monthly. You are going to pay off this loan by fixed installments
(fixed total payment) to be made at the end of each month for
thirty years. How much is each installment payment? How much is the
total principal repayment after four months? How much is the total
interest payment after four months. Draw an amortization table...

You have just taken out an amortized loan for $404,000. Assume
that the loan will be paid in 24 equal monthly installments of
$18,345.62 and that the first payment will be due 1 month from
today. How much of your third monthly payment will go toward the
repayment of principal? Fill in the worksheet below.
Month
Interest Owing
at End of Month ($)
Principal Repayment ($)
Principal Owing
at End of Month ($)
1
2
3

Part B
Your firm borrows $1m to buy a warehouse. The loan is a 30-year
mortgage at 6% per year with monthly repayments without any balloon
payment. Create an amortization table, but print out only the 30
rows of monthly payments for the anniversary months, i.e., 12, 24,
36, … , 348, and 360. The 6 needed columns are: No. of month,
Beginning balance, Monthly payment, Interest, Principal reduction,
Ending balance. Except for first column, all columns are to be...

Prepare an amortization schedule for a three-year loan of
$99,000. The interest rate is 10 percent per year, and the loan
calls for equal annual payments. How much total interest is paid
over the life of the loan? (Leave no cells blank. Enter '0'
where necessary. Do not round intermediate calculations and round
your answers to 2 decimal places, e.g., 32.16.)
Year
Beginning
Balance
Total
Payment
Interest
Payment
Principal
Payment
Ending
Balance
1
$
$
$
$
$
2
3...

Please select the False statement for an amortized loan:
It is a type of loan that requires the borrower to make
scheduled, periodic, flat payments.
The portion of the payment that goes towards interest increases
over time.
The portion of the payment that goes towards the principal
increases over time.
The ending balance of a period is the beginning balance minus
the payment made to the principal in that year

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