Rework Problem 55 assuming that the loan agreement calls for a principal reduction of $11,700 every year
Question:
Rework Problem 55 assuming that the loan agreement calls for a principal reduction of $11,700 every year instead of equal annual payments.
Problem 55
Prepare an amortization schedule for a five-year loan of $58,500. The interest rate is 6 percent per year, and the loan calls for equal annual payments. How much interest is paid in the third year? How much total interest is paid over the life of the loan?
Step by Step Answer:
Answer Ans I have taken a loan of 58500 today with interest rate of 6 computed annually on dimnishin...View the full answer
Fundamentals Of Corporate Finance
ISBN: 9781265553609
13th Edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
Related Video
An amortization schedule (sometimes called an amortization table) is a table detailing each periodic payment on an amortizing loan. Each calculation done by the calculator will also come with an annual and monthly amortization schedule above. Each repayment for an amortized loan will contain both an interest payment and payment towards the principal balance, which varies for each pay period. An amortization schedule helps indicate the specific amount that will be paid towards each, along with the interest and principal paid to date, and the remaining principal balance after each pay period
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