Question

# Crab State Bank has offered you a \$1,250,000 5-year loan at an interest rate of 10.25...

Crab State Bank has offered you a \$1,250,000 5-year loan at an interest rate of 10.25 percent, requiring equal annual end-of-year payments that include both principal and interest on the unpaid balance. Develop an amortization schedule for this loan. Round your answers to the nearest dollar.

End of Year Payment Interest (10.25%) Principal Reduction Balance Remaining

0       \$1,250,000

1 \$ \$ \$

2

3

4

5

Amortization Schedule

 Loan amount \$1,250,000 Loan term (in years) 5 Interest rate 10.25% End of year payment \$331,855 Year End of year payment Interest Principal reduction Balance Remaining 0 \$1,250,000 1 \$331,855 \$128,125 \$203,730 \$1,046,270 2 \$331,855 \$107,243 \$224,613 \$821,657 3 \$331,855 \$84,220 \$247,636 \$574,021 4 \$331,855 \$58,837 \$273,018 \$301,003 5 \$331,855 \$30,853 \$301,003 \$0 Total \$1,659,277 \$409,277 \$1,250,000

Calculations

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