1st set of photos include just the questions

2nd set of photos include the answer drop down banks

Q s Use the formula for the present value of an ordinary annuity to find this payment amount: PVAN = PMT X PMT PVAN X (1+n)N In this case, PVAN equals , I equals , and N equals Using the formula for the present value of an ordinary annuity, the annual payment amount for this loan is Because this payment is fixed over time, enter this annual payment amount in the "Payment" column of the following table for all three years. Each payment consists of two parts-interest and repayment of principal. You can calculate the interest in year 1 by multiplying the loan balance at the beginning of the year (PVAN ) by the interest rate (1). The repayment of principal is equal to the payment (PMT) minus the interest charge for the year: The interest paid in year 1 is $222.72 Enter the values for interest a of principal for year 1 in the following table. $630.00 Because the balance at the el $7,424.14 ear is equal to the beginning amount minus the repayment of principal, the ending balance for year 1 is . This is the beginning amount for year 2. $14,205.86 Enter the ending balance for year 1 and the beginning amount for year 2 in the following table.Each payment consists of two parts-interest and repayment of principal. You can calculate the interest in year 1 by multiplying the loan balance at the beginning of the year (PVAN) by the interest rate (I). The repayment of principal is equal to the payment (PMT) minus the interest charge for the year: The interest paid in year 1 is Enter the values for interest and repayment of principal for year 1 in the following table. Because the balance at the end of the first year is equal to the beginning amount minus the repayment of principal, the ending balance for year 1 is . This is the beginning amount for year 2. Enter the ending balance for year 1 and the beginning amount for year 2 in the following table. Using the same process as you did for year 1, complete the following amortization table by filling in the remaining values for years 2 and 3. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance $21,000.00 N $0.00 w $0.00 $6,997.96 Complete the following table by determining the percentage of each payment that , $7,207.90 terest and the percentage that represents principal for each of the three years. $7,424.14M Pau 1 05- Video Lesson - Time Value of Money Q Search this Use the formula for the present value of an ordinary annuity to find this payment amount: PVAN - PMTX PMT = PVAN X (1+1)N In this case, PVAN equals , I equals , and N equals Using the formula for the present value of an ordinary a 2% the annual payment amount for this loan is 3% Because this payment is fixed over time, enter this ann( 4% ent amount in the "Payment" column of the following table for all three years. Each payment consists of two parts-interest and repay 5% principal. You can calculate the interest in year 1 by multiplying the loan balance at the beginning of the year (PVAN) by the interest rate (1). The repayment of principal is equal to the payment (PMT) minus the interest charge for the year: The interest paid in year 1 is Enter the values for interest and repayment of principal for year 1 in the following table. Because the balance at the end of the first year is equal to the beginning amount minus the repayment of principal, the ending balance for year 1 the beginning amount for year 2. is . This is Enter the ending balance for year 1 and the beginning amount for year 2 in the following table.Now it's time for you to practice what you've learned. Suppose Dina receives a $32,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $32,000.00 2 3 $0.00 $993.37 $1,771.43 $11,497.29 Complete the following table by determining the percenta yment that represents interest and the percentage that represents principal $12,417.07 for each of the three years. Percentage of Payment Payment Component Year 1 Year 2 Year 3 Interest Repayment of PrincipalEach payment consists of two parts-interest and repayment of principal. You can calculate the interest in year 1 by multiplying the loan balance at the beginning of the year (PVAN) by the interest rate (I). The repayment of principal is equal to the payment (PMT) minus the interest charge for the year: The interest paid in year 1 is Enter the values for interest and repayment of principal for year 1 in the following table. Because the balance at the end of the first year is equal to the beginning amount minus the repayment of principal, the ending balance for year 1 is . This is the beginning amount for year 2. Enter the ending balance for year 1 and the beginning amount for year 2 in the following table. Using the same process as you did for year 1, complete the following amortization table by filling in the remaining values for years 2 and 3. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $21,000.00 2 $0.00 w $630.00 $6,794.14 $7,207.90 percentage of each payment that represents interest and the percentage that represents principal Complete the following table by det $7,424.14 for each of the three years.Q Search t Use the formula for the present value of an ordinary annuity to find this payment amount: PVAN = PMT X PMT PVAN X In this case, PVAN equals , I equals , and N equals Using the formula for the p $7, 424.14 an ordinary annuity, the annual payment amount for this loan is $10,000.00 Because this payment is fix $14,205.86 enter this annual payment amount in the "Payment" column of the following table for all three years. Each payment consists of to $21,000.00 fest and repayment of principal. You can calculate the interest in year 1 by multiplying the loan balance at the beginning of the year (PVAN ) by the interest rate (1). The repayment of principal is equal to the payment (PMT) minus the interest charge for the year: The interest paid in year 1 is Enter the values for interest and repayment of principal for year 1 in the following table. Because the balance at the end of the first year is equal to the beginning amount minus the repayment of principal, the ending balance for year 1 IS . This is the beginning amount for year 2. Enter the ending balance for year 1 and the beginning amount for year 2 in the following table.Each payment consists of two parts-interest and repayment of principal. You can calculate the interest in year 1 by multiplying the loan balance for the year: at the beginning of the year (PVAN) by the interest rate (1). The repayment of principal is equal to the payment (PMT) minus the interest charge The interest paid in year 1 is Enter the values for interest and repayment of principal for year 1 in the following table. Because the balance at the end of the first year is equal to the beginning amount minus the repayment of principal, the ending balance for year 1 is . This is the beginning amount for year 2. Enter the ending balance for year 1 and the beginning amount for year 2 in the following table. Using the same process as you did for year 1, complete the following amortization table by filling in the remaining values for years 2 and 3. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $21,000.00 N $6,794.14 w $0.00 $6,997.96 $7,424.14 $14,205.86 percentage of each payment that represents interest and the percentage that represents principal Complete the following table by de for each of the three years.Year Beginning Amount Payment Interest Repayment of Principal Ending Balance $21,000.00 N w $0.00 Complete the following table by determining the percentage of each payment that represents interest and the percentage that represents principal for each of the three years. Percentage of Payment Payment Component Year 1 Year 2 Year 3 Interest IF Repayment of Principal 3% Step 3: Practice: Amortization Schedule 8% Now it's time for you to practice what you've learn 92% 97% Suppose Dina receives a $32,000.00 loan to be re equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance $32,000.00Each payment consists of two parts-interest and repayment of principal. You can calculate the interest in year 1 by multiplying the loan balance at the beginning of the year (PVAN ) by the interest rate (1). The repayment of principal is equal to the payment (PMT) minus the interest charge for the year: The interest paid in year 1 is Enter the values for interest and repayment of principal for year 1 in the following table. Because the balance at the end of the first year is equal to the beginning amount minus the repayment of principal, the ending balance for year 1 is . This is the beginning amount for year 2. greater than Enter the ending balance for beginning amount for year 2 in the following table. the same as less than Using the same process as you did for year 1, complete the following amortization table by filling in the remaining values for years 2 and 3. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $21,000.00 N $0.00 w Complete the following table by determining the percentage of each payment that represents interest and the percentage that represents principal for each of the three years.Now it's time for you to practice what you've learned. Suppose Dina receives a $32,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $32,000.00 2 3 $0.00 Complete the following table 7% mining the percentage of each payment that represents interest and the percentage that represents principal for each of the three years. 21% 79% tage of Payment Payment Component Year 2 Year 3 93% Interest Repayment of PrincipalNow it's time for you to practice what you've learned. Suppose Dina receives a $32,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance $32,000.00 2 3 $0.00 $1,771.43 $9,857.07 $10,645.64 Complete the following table by determining the percentage of each payment that erest and the percentage that represents principal $11,497.29 for each of the three years. Percentage of Payment Payment Component Year 1 Year 2 Year 3 Interest Repayment of PrincipalNow it's time for you to practice what you've learned. Suppose Dina receives a $32,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance $32,000.00 N 3 $0.00 $0.00 $9,857.07 Complete the following table by de $10,645.64 percentage of each payment that represents interest and the percentage that represents principal for each of the three years. $12,417.07 Percentage of Payment Payment Component Year 1 Year 2 Year 3 Interest Repayment of PrincipalYear Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $21,000.00 2 3 $0.00 Complete the following table by determining the percentage of each payment that represents interest and the percentage that represents principal for each of the three years. Percentage of Payment Payment Component Year 1 Year 2 Year 3 Interest Repayment of Principal Step 3: Practice: Amortization Sched 3% 3% Now it's time for you to practice what y arned 94% Suppose Dina receives a $32,000.00 lo repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% 97% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Beginning Amount Payment Interest Repayment of Principal Ending Balance Year $32,000.00 2Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $21,000.00 N W $0.00 Complete the following table by determining the percentage of each payment that represents interest and the percentage that represents principal for each of the three years. Percentage of Payment Payment Component Year 1 Year 2 Year 3 Interest Repayment of Principal Step 3: Practice: Amortizat 3% edule 8% Now it's time for you to pract you've learned. 92% Suppose Dina receives a $32 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. 97% Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance $32,000.00Each payment consists of two parts-interest and repayment of principal. You can calculate the interest in year 1 by multiplying the loan balance for the year: at the beginning of the year (PVAN) by the interest rate (1). The repayment of principal is equal to the payment (PMT) minus the interest charge The interest paid in year 1 is Enter the values for interest and repayment of principal for year 1 in the following table. Because the balance at the end of the first year is equal to the beginning amount minus the repayment of principal, the ending balance for year 1 S . This is the beginning amount for year 2. Enter the ending balance for year 1 and the beginning amount for year 2 in the following table. Using the same process as you did for year 1, complete the following amortization table by filling in the remaining values for years 2 and 3. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $21,000.00 N w $0.00 $6,997.96 $7,207.90 Complete th $7,424.14 ple by determining the percentage of each payment that represents interest and the percentage that represents principal for each of $21,000.00Each payment consists of two parts-interest and repayment of principal. You can calculate the interest in year 1 by multiplying the loan balance at the beginning of the year (PVAN) by the interest rate (I). The repayment of principal is equal to the payment (PMT) minus the interest charge for the year: The interest paid in year 1 is Enter the values for interest and repayment of principal for year 1 in the following table. Because the balance at the end of the first year is equal to the beginning amount minus the repayment of principal, the ending balance for year 1 is . This is the beginning amount for year 2. Enter the ending balance for year 1 and the beginning amount for year 2 in the following table. Using the same process as you did for year 1, complete the following amortization table by filling in the remaining values for years 2 and 3. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance $21,000.00 N $6,794.14 w $0.00 $7,207.90 $7,424.14 $14,205.86 Complete the following table by determining the percentage of each payment that erest and the percentage that represents principal for each of the three years.Now it's time for you to practice what you've learned. Suppose Dina receives a $32,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $32,000.00 N W $0.00 $2,560.00 $10,645.64 $11,497.29 Complete t $22,142.93 ple by determining the percentage of each payment that represents interest and the percentage that represents principal for each of Percentage of Payment Payment Component Year 1 Year 2 Year 3 Interest Repayment of PrincipalYear Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $21,000.00 2 3 $0.00 Complete the following table by determining the percentage of each payment that represents interest and the percentage that represents principal for each of the three years. Percentage of Payment Payment Component Year 1 Year 2 Year 3 Interest Repayment of Principal 3% Step 3: Practice: Amortization Sched 6% Now it's time for you to practice what y 92% arned. 97% Suppose Dina receives a $32,000.00 loa repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Beginning Amount Payment Interest Repayment of Principal Ending Balance Year 1 $32,000.00Each payment consists of two parts-interest and repayment of principal. You can calculate the interest in year 1 by multiplying the loan balance at the beginning of the year (PVAN ) by the interest rate (1). The repayment of principal is equal to the payment (PMT) minus the interest charge for the year: The interest paid in year 1 is Enter the values for interest and repayment of principal for year 1 in the following table. Because the balance at the end of the first year is equal to the beginning amount minus the repayment of principal, the ending balance for year 1 is . This is the beginning amount for year 2. $630.00 balance for year 1 and the beginning amount for year 2 in the following table. $6,997.96 $7,207.90 $14,205.86 Using the same process as you did for year 1, complete the following amortization table by filling in the remaining values for years 2 and 3. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $21,000.00 W N $0.00 Complete the following table by determining the percentage of each payment that represents interest and the percentage that represents principal for each of the three years.Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $21,000.00 N w $0.00 Complete the following table by determining the percentage of each payment that represents interest and the percentage that represents principal for each of the three years. Percentage of Payment Payment Component Year 1 Year 2 Year 3 Interest Repayment of Principal Step 3: Practice: Amortization Schedule 3% 3% Now it's time for you to practice what you've learn 92% Suppose Dina receives a $32,000.00 loan to be re equal installments at the end of each of the next 3 years. The interest rate is 8% 97% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $32,000.00 2Now it's time for you to practice what you've learned. Suppose Dina receives a $32,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $32,000.00 N 3 $10,645.64 $11,497.29 $12,417.07 Complete the following table by determining the percentage of each payment that represents interest and th that represents principal $32,000.00 for each of the three years. Percentage of Payment Payment Component Year 1 Year 2 Year 3 Interest Repayment of Principal$6,000 Notice that the interest portion is relatively high in the first year, but then it declines as the loan balance decreases. The repayment of principal is equal to the payment minus the interest charge for the year: Repayment of Principal in Year 1 = Payment - Interest in Year 1 $23,739.64 - $6,000 $17,739.64 You can perform similar calculations to fill in the remainder of the amortization schedule. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $100,000.00 $23,739.64 $6,000.00 $17,739.64 $82,260.36 2 82,260.36 23,739.64 4,935.62 18,804.02 63,456.34 3 63,456.34 23,739.64 3,807.38 19,932.26 43,524.08 4 43,524.08 23,739.64 2,611.44 21,128.20 22,395.89 15 22,395.89 23,739.64 1,343.75 22,395.89 0.00 Suppose Charles borrows $50,000.00 on a mortgage loan, and the loan is to be repaid in 7 equal payments at the end of each of the next 7 years. If the lender charges 6% on the balance at the beginning of each year, and the homeowner makes an annual payment of $8,956.75, the homeowner will pay in interest in the first year.An amortized loan is a loan that requires payments over the life of the loan. An amortized loan is a loan that is to be variable al amounts on a monthly, quarterly, or annual basis. Many loans such as car loans, home interest. mortgage loans, and student loans are pa decreasing he in regular, fixed installments; these loans are a great real-world application of compound fixed For example, suppose a homeowner born the next 5 years. If the lender charges 69 increasing on a mortgage loan, and the loan is to be repaid in 5 equal payments at the end of each of nce at the beginning of each year, what is the payment the homeowner must make each year? Given what you know about present value (PV) and future value (FV), you can deduce that the sum of the PV of each payment the homeowner makes must add up to $100,000: $100,000 PMT PMT + 3 PMT PMT PMT 1.061 1.062 1.063 1.064 1.06 PMT t=1 1.06 You can use the formula for the present value of an ordinary annuity to find this payment amount: PVAN = PMTX $100,000 PMT X (14 0.06)5 0.06 PMT = $23,739.64 Each payment of $23,739.64 consists of two parts-interest and repayment of principal. An amortization schedule shows this breakdown over time. You can calculate the interest in each period by multiplying the loan balance at the beginning of the year by the interest rate:Now it's time for you to practice what you've learned. Suppose Dina receives a $32,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $32,000.00 N W $0.00 7% Complete the following table 21% mining the percentage of each payment that represents interest and the percentage that represents principal for each of the three years. 79% tage of Payment 93% Payment Component Year 2 Year 3 Interest Repayment of Principalequal to the payment minus the interest charge for the year: Repayment of Principal in Year 1 = Payment - Interest in Year 1 $23,739.64 - $6,000 $17,739.64 You can perform similar calculations to fill in the remainder of the amortization schedule. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $100,000.00 $23,739.64 $6,000.00 $17,739.64 $82,260.36 N 82,260.36 23,739.64 4,935.62 18,804.02 63,456.34 3 63,456.34 23,739.64 3,807.38 19,932.26 43,524.08 4 43,524.08 23,739.64 2,611.44 21,128.20 22,395.89 UT 22,395.89 23,739.64 1,343.75 22,395.89 0.00 Suppose Charles borrows $50,000.00 on a mortgage loan, and the loan is to be repaid in 7 equal payments at the end of each of the next 7 years. If the lender charges 6% on the balance at the beginning of each year, and the homeowner makes an annual payment of $8,956.75, the homeowner will pay in interest in the first year. $3,000.00 Step 2: Learn: Amor edule $8,956.75 Amortization schedu ul tool in breaking down your loan payment into its interest and principal repayment components. $5,956.75 Watch the following $537.41 example, then answer the questions that follow.Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $21, 000.00 N 3 $0.00 Complete the following table by determining the percentage of each payment that represents interest and the percentage that represents principal for each of the three years. Percentage of Payment Payment Component Year 1 Year 2 Year 3 Interest Repayment of Principal 3% Step 3: Practice: Amortizati 8% edule Now it's time for you to pract 92% t you've learned. Suppose Dina receives a $32 97% loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Repayment of Principal Ending Balance Year Beginning Amount Payment Interest $32,000.00 2Each payment consists of two parts-interest and repayment of principal. You can calculate the interest in year 1 by multiplying the loan balance for the year: at the beginning of the year (PVAN) by the interest rate (1). The repayment of principal is equal to the payment (PMT) minus the interest charge The interest paid in year 1 is Enter the values for interest and repayment of principal for year 1 in the following table. Because the balance at the end of the first year is equal to the beginning amount minus the repayment of principal, the ending balance for year 1 IS . This is the beginning amount for year 2. Enter the ending balance for year 1 and the beginning amount for year 2 in the following table. Using the same process as you did for year 1, complete the following amortization table by filling in the remaining values for years 2 and 3. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $21,000.00 N W $0.00 $630.00 $6,997.96 $7,207.90 Complete t/ ple by determining the percentage of each payment that represents interest and the percentage that represents principal $14,205.86 for each ofNow it's time for you to practice what you've learned. Suppose Dina receives a $32,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $32,000.00 N W $0.00 $0.00 $10,645.64 Complete the following table by determining the percentage of each payment that |$11,497.29 erest and the percentage that represents principal for each of the three years. $12,417.07 Percentage of Payment Payment Component Year 1 Year 2 Year 3 Interest Repayment of PrincipalNow it's time for you to practice what you've learned. Suppose Dina receives a $32,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance $32,000.00 2 3 $0.00 $0.00 $919.78 Complete the following table by determining the percenta $993.37 ment that represents interest and the percentage that represents principal for each of the three years. $12,417.07 Percentage of Payment Payment Component Year 1 Year 2 Year 3 Interest Repayment of PrincipalNow it's time for you to practice what you've learned. Suppose Dina receives a $32,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance H $32,000.00 2 3 $0.00 7% Complete the following table by determ 14% e percentage of each payment that represents interest and the percentage that represents principal for each of the three years. 79% Percenta ayment 93% Payment Component Year 1 Year 3 Interest Repayment of PrincipalNow it's time for you to practice what you've learned. Suppose Dina receives a $32,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance $32,000.00 N 3 $993.37 $0.00 $2,560.00 $12,417.07 $22,142.93 Complete the following table by determining the percenta yment that represents interest and the percentage that represents principal for each of the three years. Percentage of Payment Payment Component Year 1 Year 2 Year 3 Interest Repayment of PrincipalEach payment consists of two parts-interest and repayment of principal. You can calculate the interest in year 1 by multiplying the loan balance at the beginning of the year (PVAN) by the interest rate (I). The repayment of principal is equal to the payment (PMT) minus the interest charge for the year: The interest paid in year 1 is Enter the values for interest and repayment of principal for year 1 in the following table. Because the balance at the end of the first year is equal to the beginning amount minus the repayment of principal, the ending balance for year 1 is . This is the beginning amount for year 2. Enter the ending balance for year 1 and the beginning amount for year 2 in the following table. Using the same process as you did for year 1, complete the following amortization table by filling in the remaining values for years 2 and 3. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance $21,000.00 N $0.00 w $0.00 $6,794.14 Complete the following table by det $6,997.96 percentage of each payment that represents interest and the percentage that represents principal for each of the three years. $7,424.14Now it's time for you to practice what you've learned. Suppose Dina receives a $32,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $32,000.00 N 3 $9,857.07 $0.00 $10,645.64 $12,417.07 $22,142.93 Complete the following table by de percentage of each payment that represents interest and the percentage that represents principal for each of the three years. Percentage of Payment Payment Component Year 1 Year 2 Year 3 Interest Repayment of PrincipalNow it's time for you to practice what you've learned. Suppose Dina receives a $32,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance $32,000.00 2 3 $0.00 7% Complete the following table by determining the p ge of each payment that represents interest and the percentage that represents principal for each of the three years. 21% Percentage of Payl 79% Payment Component Year 1 Year 2 93% Interest Repayment of PrincipalAn amortized loan is a loan that requires payments over the life of the loan. An amortized loan is a loan that is to be repaid in equal amounts on a monthly, quarterly, or annual basis. Many loans such as car loans, home mortgage loans, and student loans are paid off over time in regular, fixed installments; these loans are a great real-world application of compound interest. For example, suppose a homeowner borrows $100,000 on a mortgage loan, and the loan is to be repaid in 5 equal payments at the end of each of the next 5 years. If the lender charges 6% on the balance at the beginning of each year, what is the payment the homeowner must make each year? Given what you know about present value (PV) and future value (FV), you can deduce that the sum of the PV of each payment the homeowner makes must add up to $100,000: $100,000 = PMT PMT PMT PMT PMT 1.061 1.062 1.063 1.064 1.065 5 PMT 1.06 You can use the formula for the present value of an ordinary annuity to find this payment amount: PVAN - PMTX (1+nN $100,000 PMT X (1+0.06)5 0.06 PMT = $23,739.64 Each payment of $23,739.64 consists of two parts-interest and repayment of principal. An amortization schedule shows this breakdown over time. You can calculate the interest in each period by multiplying the loan balance at the beginning of the year by the interest rate:Now it's time for you to practice what you've learned. Suppose Dina receives a $32,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $32,000.00 N W $0.00 $2,560.00 $9,857.07 $11,497.29 Complete the following table by de $12,417.07 percentage of each payment that represents interest and the percentage that represents principal for each of the three years. Percentage of Payment Payment Component Year 1 Year 2 Year 3 Interest Repayment of Principali Each payment consists of two parts-interest and repayment of principal. You can calculate the interest in year 1 by multiplying the loan balance at the beginning of the year (PVAN) by the interest rate (1). The repayment of principal is equal to the payment (PMT) minus the interest charge for the year: The interest paid in year 1 is Enter the values for interest and repayment of principal for year 1 in the following table. Because the balance at the end of the first year is equal to the beginning amount minus the repayment of principal, the ending balance for year 1 is . This is the beginning amount for year 2. Enter the ending balance for year 1 and the beginning amount for year 2 in the following table. Using the same process as you did for year 1, complete the following amortization table by filling in the remaining values for years 2 and 3. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $21,000.00 N w $0.00 $426.18 $6,794.14 $6,997.96 Complete the following table by determining the percentage of each payment that erest and the percentage that represents principal $7,207.90 for each of the three years.Each payment consists of two parts-interest and repayment of principal. You can calculate the interest in year 1 by multiplying the loan balance at the beginning of the year (PVAN) by the interest rate (1). The repayment of principal is equal to the payment (PMT) minus the interest charge for the year: The interest paid in year 1 is Enter the values for interest and repayment of principal for year 1 in the following table. Because the balance at the end of the first year is equal to the beginning amount minus the repayment of principal, the ending balance for year 1 is . This is the beginning amount for year 2. Enter the ending balance for year 1 and the beginning amount for year 2 in the following table. Using the same process as you did for year 1, complete the following amortization table by filling in the remaining values for years 2 and 3. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $21,000.00 2 3 $6,997.96 $7,207.90 $7,424.14 Complete the following table by determining the percentage of each payment that represents interest and th that represents principal $21,000.00 for each of the three years.Use the formula for the present value of an ordinary annuity to find this payment amount: PVAN = PMT X (1+1)N PMT = PVAN X (1+1)N In this case, PVAN equals , I equals , and N equals IF Using the formula for the present value of an ordinary annuity, the annual payment amount for this loan is $6,794.14 Because this payment is fixed over time, enter this annual payment amount in the "Payment" column of the e for all three years. $6,997.96 Each payment consists of two parts-interest and repayment of principal. You can calculate the interest in $7,424.14 plying the loan balance at the beginning of the year (PVAN) by the interest rate (1). The repayment of principal is equal to the pay inus the interest charge for the year: $14,205.86 The interest paid in year 1 is Enter the values for interest and repayment of principal for year 1 in the following table. Because the balance at the end of the first year is equal to the beginning amount minus the repayment of principal, the ending balance for year 1 is . This is the beginning amount for year 2. Enter the ending balance for year 1 and the beginning amount for year 2 in the following table.Each payment consists of two parts-interest and repayment of principal. You can calculate the interest in year 1 by multiplying the loan balance at the beginning of the year (PVAN) by the interest rate (1). The repayment of principal is equal to the payment (PMT) minus the interest charge for the year: The interest paid in year 1 is Enter the values for interest and repayment of principal for year 1 in the following table. Because the balance at the end of the first year is equal to the beginning amount minus the repayment of principal, the ending balance for year 1 is . This is the beginning amount for year 2. Enter the ending balance for year 1 and the beginning amount for year 2 in the following table. Using the same process as you did for year 1, complete the following amortization table by filling in the remaining values for years 2 and 3. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance $21,000.00 N $630.00 w $6,997.96 $7,207.90 $14,205.86 that represents principal Complete the following table by determining the percentage of each payment that represents interest and th for each of the three years.Now it's time for you to practice what you've learned. Suppose Dina receives a $32,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $32,000.00 N 3 $0.00 $10,645.64 $11,497.29 Complete th $12,417.07 ble by determining the percentage of each payment that represents interest and the percentage that represents principal for each of $32,000.00 Percentage of Payment Payment Component Year 1 Year 2 Year 3 Interest Repayment of PrincipalSuppose Charles receives a $21,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 3% compounded annually. Use the formula for the present value of an ordinary annuity to find this payment amount: PVAN = PMT X 1+IN PMT PVAN X In this case, PVAN equals , I equals , and N equals_ Using the formula for the present value of an ordinary annuity, the annual payment amount for this loan is Because this payment is fixed over time, enter this annual payment amount in the "Payment" column of the following table for all three years. G Each payment consists of two parts-interest and repayment of principal. You can calculate the interest in year 1 by multiplying the loan balance at the beginning of the year (PVAN) by the interest rate (I). The repayment of principal is equal to the payment (PMT) minus the interest charge for the year: The interest paid in year 1 is Enter the values for interest and repayment of principal for year 1 in the following table.time. You can calculate the interest in each period by multiplying the loan balance at the beginning of the year by the interest rate: Interest in Year 1 = Loan Balance at the Beginning of Year 1 x Interest Rate = $100,000 x 0.06 $6,000 Notice that the interest portion is relatively high in the first year, but then it declines as the loan balance decreases. The repayment of principal is equal to the payment minus the interest charge for the year: Repayment of Principal in Year 1 = Payment - Interest in Year 1 $23,739.64 - $6,000 $17,739.64 You can perform similar calculations to fill in the remainder of the amortization schedule. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $100,000.00 $23,739.64 $6,000.00 $17,739.64 $82,260.36 N 82,260.36 23,739.64 4,935.62 18,804.02 63,456.34 3 63,456.34 23,739.64 3,807.38 19,932.26 43,524.08 A 43,524.08 23,739.64 2,611.44 21,128.20 22,395.89 5 22,395.89 23,739.64 1,343.75 22,395.89 0.00Now it's time for you to practice what you've learned. Suppose Dina receives a $32,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $32,000.00 2 3 $9,857.07 $0.00 $11,497.29 $12,417.07 $22,142.93 Complete the following table by determining the percentage of each payment that Jerest and the percentage that represents principal for each of the three years. Percentage of Payment Payment Component Year 1 Year 2 Year 3 Interest 1 Repayment of PrincipalThe interest paid in year 1 is Enter the values for interest and repayment of principal for year 1 in the following table. Because the balance at the end of the first year is equal to the beginning amount minus the repayment of principal, the ending balance for year 1 IS . This is the beginning amount for year 2. Enter the ending balance for year 1 and the beginning amount for year 2 in the following table. Using the same process as you did for year 1, complete the following amortization table by filling in the remaining values for years 2 and 3. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $21,000.00 N w $0.00 Complete the following table by determining the percentage of each payment that represents interest and the percentage that represents principal for each of the three years. Percentage of Payment Payment Component Year 1 Year 2 Year 3 Interest Repayment of PrincipalEach payment consists of two parts-interest and repayment of principal. You can calculate the interest in year 1 by multiplying the loan balance at the beginning of the year (PVAN) by the interest rate (1). The repayment of principal is equal to the payment (PMT) minus the interest charge for the year: The interest paid in year 1 is Enter the values for interest and repayment of principal for year 1 in the following table. Because the balance at the end of the first year is equal to the beginning amount minus the repayment of principal, the ending balance for year 1 IS . This is the beginning amount for year 2. Enter the ending balance for year 1 and the beginning amount for year 2 in the following table. Using the same process as you did for year 1, complete the following amortization table by filling in the remaining values for years 2 and 3. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance $21,000.00 N $222.72 w $0.00 $630.00 $7,424.14 $14,205.86 Complete the following table by determining the percent Jyment that represents interest and the percentage that represents principal for each of the three years.Now it's time for you to practice what you've learned. Suppose Dina receives a $32,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $32,000.00 N W $0.00 7% Complete the following table by determining the p 21% ge of each payment that represents interest and the percentage that represents principa for each of the three years. 79% Percentage of Pay 93% Payment Component Year 1 Year 2 Interest IF Repayment of PrincipalNow it's time for you to practice what you've learned. Suppose Dina receives a $32,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance $32,000.00 2 3 $0.00 Complete the following table by determ 7% e percentage of each payment that represents interest and the percentage that represents principal for each of the three years. 21% Percenta 86% ayment Payment Component Year 1 Year 3 93% Interest Repayment of PrincipalEach payment consists of two parts-interest and repayment of principal. You can calculate the interest in year 1 by multiplying the loan balance at the beginning of the year (PVAN) by the interest rate (I). The repayment of principal is equal to the payment (PMT) minus the interest charge for the year: The interest paid in year 1 is Enter the values for interest and repayment of principal for year 1 in the following table. Because the balance at the end of the first year is equal to the beginning amount minus the repayment of principal, the ending balance for year 1 is . This is the beginning amount for year 2. Enter the ending balance for year 1 and the beginning amount for year 2 in the following table. Using the same process as you did for year 1, complete the following amortization table by filling in the remaining values for years 2 and 3. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $21,000.00 W N $0.00 $222.72 $426.18 $7,207.90 yment that represents interest and the percentage that represents principal Complete the following table by determining the percenta $7,424.14 for each of the three years.Repayment of Principal Step 3: Practice: Amortization Schedule Now it's time for you to practice what you've learned. Suppose Dina receives a $32,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance 1 $32,000.00 N w $0.00 Complete the following table by determining the percentage of each payment that represents interest and the percentage that represents principal for each of the three years. Percentage of Payment Payment Component Year 1 Year 2 Year 3 Interest Repayment of PrincipalNow it's time for you to practice what you've learned. Suppose Dina receives a $32,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance $32,000.00 N $2,560.00 W $10,645.64 $11,497.29 $22,142.93 Complete the following table by determining the percentage of each payment that represents interest and th that represents principal for each of the three years. Percentage of Payment Payment Component Year 1 Year 2 Year 3 Interest Repayment of PrincipalSearch this Use the formula for the present value of an ordinary annuity to find this payment amount: PVAN = PMT X (1+D)N PMT PVAN X (1+D)N In this case, PVAN equals , I equals , and N equals Using the formula for the present value of an ordinary annuity, the annual pa 1 amount for this loan is 2 Because this payment is fixed over time, enter this annual payment amount 3 Payment" column of the following table for all three years. Each payment consists of two parts-interest and repayment of principal. You 4 culate the interest in year 1 by multiplying the loan balance at the beginning of the year (PVAN) by the interest rate (1). The repayment of principal is equal to the payment (PMT) minus the interest charge for the year: The interest paid in year 1 is Enter the values for interest and repayment of principal for year 1 in the following table. Because the balance at the end of the first year is equal to the beginning amount minus the repayment of principal, the ending balance for year 1 IS . This is the beginning amount for year 2. Enter the ending balance for year 1 and the beginning amount for year 2 in the following table.Q Search this c 05- Video Lesson - Time Value of Money Each payment consists of two parts-interest and repayment of principal. You can calculate the interest in year 1 by multiplying the loan balance at the beginning of the year (PVAN) by the interest rate (I). The repayment of principal is equal to the payment (PMT) minus the interest charge for the year: The interest paid in year 1 is Enter the values for interest and repayment of principal for year 1 in the following table. Because the balance at the end of the first year is equal to the beginning amount minus the repayment of principal, the ending balance for year 1 is . This is the beginning amount for year 2. Enter the ending balance for year 1 and the beginning amount for year 2 in the following table. Using the same process as you did for year 1, complete the following amortization table by filling in the remaining values for years 2 and 3. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance $21,000.00 N $0.00 w $0.00 $216.24 $222.72 yment that represents interest and the percentage that represents principal Complete the following table by determining the percental for each of the three years. $7,424.14