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Question 6 AMORTIZATION SCHEDULE A. Joan Williams borrowed $15 000 at 14% annual rate of interest to be repaid over three years. The loan is

Question 6

AMORTIZATION SCHEDULE

A. Joan Williams borrowed $15 000 at 14% annual rate of interest to be repaid over three years. The loan is repaid over three equal end of year payments.

i.) Calculate the annual end of year payments

ii) Prepare a loan amortization schedule showing the interest and principal breakdown of each of the three loan payments

B. What percentage of the payment represents interest and what percentage represents principal for each of the 3 years? Why do these percentages change overtime?

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