AN AMORTIZATION. Answer the following questions and show your solutions (20 points)

The interest rate on a $14,000 loan is 8.4% compounded semiannually. Semiannual payments will pay off the loan in 7 years.

a. Construct the amortization schedule for the above loan.

2

3

4

5

PAYMEN T

INTERES T PORTION

PRINCIPA L PORTION

PRINCIPA L BALANCE

PAYMEN T#

1

6

7

8

9

10

11

12

13

14

b. Calculate the interest component of Payment 10

c. Calculate the principal component of Payment 3

d. Calculate the interest paid in Year 6

e. Calculate the principal component in Payment 5.