Suppose Kevin receives a $21,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The Interest rate is 3% compounded annually Use the formula for the present value of an ordinary annuity to find this payment amount: PVAN PMTX 1 PMT PVAX In this case, PVA equals I equals and Nequals Using the formula for the present value of an ordinary annully, the annual payment amount for this loan is Because this payment is mixed over time, enter this annual payment amount in the payment" column of the following table for all three years. Each payment consists of two parts -Interest and repayment of principal. You can calculate the Interest in your 1 by multiplying the loan balance at that beginning of the year (PVAN) by the Interest rate (1). The repayment of principal is equal to the payment (PMT) minus the interest charge for the Year The interest bald in year 118 Enter the values for intents and repayment of principal for year in the following cable Enter the values for interest and repayment of principal for year 1 In the following table. Because the balance at the end of the first year is equal to the beginning amount minus the repayment of principal, the ending balance for year 1 This is the beginning amount for year 2. Enter the ending balance for year 1 and the beginning amount for year 2 in the following table. Using the same process as you did for year 1, complete the following amortization table by filling in the remaining values for years 2 and 3. Year Beginning Amount Payment Interest Repayment of Principal Ending Balance $21,000.00 1 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 Percentage of Payment Payment Component Year 1 Year 2 Year 3 Interest Repayment of Principal