Question
Suppose Beth receives a $34,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate
Suppose Beth receives a $34,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually.
Complete the following amortization schedule by calculating the payment, interest, repayment of principal, and ending balance for each year.
| Year | Beginning Amount | Payment | Interest | Repayment of Principal | Ending Balance |
|---|---|---|---|---|---|
| 1 | $34,000.00 | ||||
| 2 | |||||
| 3 | $0.00 |
Complete the following table by determining the percentage of each payment that represents interest and the percentage that represents principal for each of the three years.
| Payment Component | Percentage of Payment | ||
|---|---|---|---|
| Year 1 | Year 2 | Year 3 | |
| Interest | |||
| Repayment of Principal | |||
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Stock Markets And Corporate Finance A Primer
Authors: Michael Dempsey
1st Edition
1800611471,1800611498
