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Consider a 4-year amortizing loan. You borrow $468,000 initially, and repay it in four equal annual year-end payments. a. If the interest rate is 5.18%,
Consider a 4-year amortizing loan. You borrow $468,000 initially, and repay it in four equal annual year-end payments. |
a. | If the interest rate is 5.18%, calculate the annual payment. (Do not round intermediate calculations. Round your answer to 2 decimal places.) |
Annual payment | $ |
b. | Prepare an amortization schedule. (Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to 2 decimal places.) |
Time | Loan Balance | Year-End Interest Due on Balance | Year-End Payment | Amortization of Loan |
0 | $ | $ | $ | $ |
1 | ||||
2 | ||||
3 | ||||
4 | ||||
c-1. | What is the loan balance at the end of year 1? (Do not round intermediate calculations. Round your answer to 2 decimal places.) |
Loan balance | $ |
c-2. | Is it the present value of the remaining loan payments? |
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