Question

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

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