Question
PART A. THE AMORTISATION SCHEDULE WORKSHEET (6.5 marks) In this part of the assignment, you are required to prepare a loan repayment schedule of a
PART A. THE AMORTISATION SCHEDULE WORKSHEET (6.5 marks) In this part of the assignment, you are required to prepare a loan repayment schedule of a loan with an interest-only period of the first NPER1 months. During the first NPER1 months, only the interest amount (IO) is paid at the end of each month. After the first NPER1 months, an equal month-end repayment including the principal and the interest (P&I repayments) is made at the end of each month for NPER2 months until the end of the loan term. For example, if NPER1=60 and NPER2=300: Your loan has an interest only (IO) period of 60 months. During the first 60 months, you only repay the interest amount at the end of each month. Starting from the 61st month, you repay an equal amount including both the principal and the interest (P&I repayments) at the end of each month for 300 months. The loan will be fully repaid after 360 months (NPER1+NPER2). The ending balance of the loan for month 360 should be zero (or close to zero because of rounding).
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