Your firm is considering a financing opportunity to purchase some equipment. A loan is available for $10,000, the interest rate is 4%, and the term is three years with three annual payments. In order to determine the impact on your firms cash flow, your boss (who has no use for computers) has asked you to provide him with a three-year amortization schedule indicating the annual payment and amount of principle and interest due each of the three years. On the table below, complete the amortization schedule for this loan. (The ending balance should be at or about $0.00.)

Year Beg. Balance Payment Interest Principle Ending Balance

___ _________ ______ _______ ______ ____________

___ _________ ______ _______ ______ ____________

___ _________ ______ _______ ______ ____________