Question

A $9500 loan is to be amortized at 12% compounded quarterly with quarterly payments of $760. Complete the first three lines of an amortization schedule on your own paper. Then answer the following questions:

a. What is the balance at the end of the first quarter?

b. What is the amount of interest paid in the third quarter?

Answer 1

Please find the amortization schedule for the first three quarters

Quarterly interest=12%/4=3% (4 quarters in a year)

Periods	Opening balance	Quarterly payment	Interest=(Opening balance*3%)	Principal=Quarterly payment-Interest	Ending balance=Opening balance-principal
1	9500.00	760.00	285.00	475.00	9025.00
2	9025.00	760.00	270.75	489.25	8535.75
3	8535.75	760.00	256.07	503.93	8031.82

a. The end of first quarter balance is $9025

b. The interest paid in 3rd quarter=$256.07