Loan amortization schedule Personal Finance Problem Joan Messineo borrowed $46,000 at a 3% annual rate of interest to be repaid over 3 years. The loan is amortized into three equal, annual, end-of-year payments. a. Calculate the annual, end-of-year loan payment. b. Prepare a loan amortization schedule showing the interest and principal breakdown of each of the three loan payments. c. Explain why the interest portion of each payment declines with the passage of time. What portion of the payment is applied to interest in year 3? (Round to the nearest cent.) End-of-year 1 2 Beginning of-year principal $46,000 $31,117.60 $15,788.73 Loan payment $16,262.40 $16,262.40 $16,262.40 Payments Interest Principal $1,380.00 $14,882.40 $933.53 $15,328.87 $ End-of-year principal $31.117.60 $15.788.73 3 What portion of the payment is applied to the principal in year 3? (Round to the nearest cent.) End-of-year Beginning- of-year principal $46,000 $31,117.60 $15,788.73 1 Loan payment $16,262.40 $16,262.40 $16.262.40 Payments Interest Principal $1,380.00 $14,882.40 $933.53 $15.328.87 $473.66 $ End-of-year principal $31,117.60 $15.788.73 2 3 What is the principal balance at the end of year 3? (Round to the nearest cent.) End-of-year 1 2 Beginning- of-year principal $46,000 $31,117.60 $15,788.73 Loan payment $16,262.40 $16,262.40 $16,262.40 Payments Interest Principal $1,380.00 $14,882.40 $933.53 $15,328.87 $473.66 $15,788.74 End-of-year principal $31,117.60 $15,788.73 $ 3 c. Explain why the interest portion of each payment declines with the passage of time. (Select the best answer below.) O A. Through annual end-of-the-year payments, the principal balance of the loan is declining, causing less interest to be accrued on the balance OB. Through annual end-of-the-year payments, the principal balance of the loan is declining, causing more interest to be accrued on the balance. O c. Through annual end-of-the-year payments, the principal balance of the loan is increasing, causing less interest to be accrued on the balance. OD. Through annual end-of-the-year payments, the interest balance of the loan is declining, causing less principal to be accrued on the balance