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4 November, 03:08

Prepare an amortization schedule for a five-year loan of $71,500. The interest rate is 7 percent per year, and the loan calls for equal annual payments. (Do not round intermediate calculations and round your answers to 2 decimal places, e. g., 32.16. Leave no cells blank - be certain to enter "0" wherever required.)

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  1. 4 November, 06:51
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    Let's recall the formula that will be used for calculations

    The annual payment on the loan=Present value of a loan/PVIFA

    r=7%; n=5

    Annual payment on the loan=71500/4.100197=17438.19

    OR we can use the financial calculator and input the following dа ta:

    PV = 71500; r=7%; n=5; PMT=?

    PMT=17438.19

    Amortization schedule:

    YEAR Beg. balance Total PMT Interest PMT Principal PMT End. Bal.

    1 71500 17438.19 5005 12433.19 59066.81

    2 59066.81 17438.19 4134.68 13303.51 45763.3

    3 45763.30 17438.19 3203.43 14234.76 31528.54

    4 31528.54 17438.19 2207 15231.19 16297.35

    5 16297.35 17438.19 1140.81 16297.38 0

    *5005 = 71500 * 0.07

    12433.19=17438.19-5005 and so on ...
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