Question

# Prepare an amortization schedule for a five-year loan of \$72,000. Assume the loan agreement calls for...

 Prepare an amortization schedule for a five-year loan of \$72,000. Assume the loan agreement calls for a principal reduction of \$14,400 every year. The interest rate is 8 percent per year. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Leave no cells blank - be certain to enter "0" wherever required.)

 How much total interest is paid over the life of the loan? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Interest will be calculated on Beginning balance @ 8%

Total payment will be = interest + \$14400

5760

Beginning Total payment Interest Principal ending balanc

balance Beg.Bal @9% payment Beg balance - Principal

72000. 20160. 5760. 14400 57600

57600 19008. 4608 14400 43200

43200 17856. 3456 14400 28800

28800 16704 2304 14400. 14400

14400. 15552 1152. 14400. 0

Total Interest paid = 5760+4608+3456+2304+1152 17280

So, Total Interest paid during life of loan is \$17280

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