Excel Online Structured Activity: Amortization schedule The data on a loan has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. IHAN Open spreadsheet a. Complete an amortization schedule for a $35,000 loan to be repaid in equal installments at the end of each of the next three years. The interest rate is 10% compounded annually. Round all answers to the nearest cent. Beginning Balance Year Payment Repayment of Principal Ending Balance Interest 1 $ $ $ $ $ 2 $ $ $ $ $ 3 $ $ $ $ $ b. What percentage of the payment represents interest and what percentage represents principal for each of the three years? Round all answers to two decimal places % Interest % Principal Year 1: % % Year 2: % % Year 3: % % c. Why do these percentages change over time? I. These percentages change over time because even though the total payment is constant the amount of interest paid each year is declining as the remaining or outstanding balance declines. II. These percentages change over time because even though the total payment is constant the amount of interest paid each vear is increasing as the c. Why do these percentages change over time? 1. These percentages change over time because even though the total payment is constant the amount of interest paid each year is declining as the remaining or outstanding balance declines. II. These percentages change over time because even though the total payment is constant the amount of interest paid each year is increasing as the remaining or outstanding balance declines. III. These percentages change over time because even though the total payment is constant the amount of interest paid each year is declining as the remaining or outstanding balance increases. IV. These percentages change over time because even though the total payment is constant the amount of interest paid each year is increasing as the remaining or outstanding balance increases. V. These percentages do not change over time; interest and principal are each a constant percentage of the total payment. x Excel template Saved File Home Insert Formulas Data Review View Help Tell me what you want to do Xcut Arial 10 ' ' General Paste BIURO A $ - % , &8 In Copy Format Painter Clipboard f Insert Delete Conditional Format Cell Formatting - as Table - Styles Tables Undo Font Algnment Number Cells K2 B Amortization schedule D E F G H Loan amount to be repaid (PV) Interest rate (0) Length of loan (In years) $35,000.00 10.00% 3 a Setting up amortization table Calculation of loan payment Formula #N/A Repayment of Principal Remaining Balance 10 Year Beginning Balance Payment Interest 1 12 2 13 3 14 15 b. Calculating % of Payment Representing Interest and Principal for Each Year Payment % Payment % Representing Representing Check: Total 6 Year Interest Principal 100% 7 1 8 2 9 0 1 Formulas 3 2 3 4 5 5 7 Year 1 2 3 Beginning Balance #N/A =N/A #N/A Payment #N/A #N/A #N/A Interest #N/A #NIA #NIA Repayment of Principal #NA #N/A #N/A Remaining Balance #N/A #N/A #N/A F Claude DARAH. Daniel En VAR- Sheet1 ini RA LL- x Excel template Saved File Home Insert Formulas Data Review View Help Tell me what you want to do Cut Arial 10 AA 22 General th Paste B Insert OM I U Dab A $ -% -8 [b Copy Format Painter Clipboard fo Conditional Format Cell Formatting as Table Styles Tables ndo Font Alignment Number 2 A B D E F G 2 3 8 9 0 1 Formulas Repayment of Principal INA #N/A #NIA Remaining Balance #N/A UNIA #NIA 2 Year Beginning Balance Payment Interest 3 1 #NA WNIA WN/A 4 2 #NA #N/A #N/A 5 3 WNA WNIA #N/A 6 7 b. Calculating % of Payment Representing Interest and Principal for Each Year Payment % Payment % Representing Representing Check: Total 3 Year Interest Principal 100% 1 #N/A WNIA WNIA 3 2 #N/A F #NA #N/A 1 3 #N/A WNA #N/A 2 3 5 5 3
