Question

Develop an amortization schedule for the loan described. (Round your answers to the nearest cent.) $80,000...

Develop an amortization schedule for the loan described. (Round your answers to the nearest cent.)

$80,000 for 3 years at 10% compounded annually

Period Payment Interest Balance Reduction Unpaid Balance
$80,000
1 $ $ $ $
2 $ $ $ $
3 $ $ $ $0.00

Homework Answers

Answer #1

Loan amount L=80000

Numbr of Years N=3

rate r=10%

Payment per year P= L*r/(1-(1+r)^-N)

P=80000*10%/(1-(1+10%)^-3)

P=$32169.18

Interest for Nth Year = Unpaid balance for (N-1)th year*10%

Reduction for Nth Year = Payment-Interest for Nth Year

Unpaid Balance for Nth Year =Unpaid balance for (N-1)th year-Reduction for Nth Year

Year Payment Interest Reduction Unpaid Balance
80000
1 32169.18 8000.00 24169.18 55830.82
2 32169.18 5583.08 26586.10 29244.72
3 32169.18 2924.47 29244.71 0.00
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