Question
Suppose Latasha receives a $32,000.00 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate
Suppose Latasha receives a $32,000.00 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 | $32,000.00 | ||||
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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