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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