Complete an amortization schedule for a $46,000 loan to be repaid in equal installments at the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Complete an amortization schedule for a $46,000 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 9% compounded annually. If an amount is zero, enter "0". Do not round intermediate calculations. Round your answers to the nearest cent. Year 1 2 3 $ Beginning Balance Payment % % % % $ % Interest %% $ b. What percentage of the payment represents interest and what percentage represents principal for each of the 3 years? Do not round intermediate calculations, Round your answers to two decimal places. % Interest % Principal Repayment of Principal Year 1: Year 2: Year 3: Why do these percentages change over time? 1. These percentages change over time because even though the total payment is constant the amount of interest paid each year is declining as the remaining or outstanding balance declines. $ Remaining Balance II. These percentages change over time because even though the total payment is constant the amount of interest paid each year is increasing as the remaining or outstanding balance declines. III. These percentages change over time because even though the total payment is constant the amount of interest paid each year is declining as the remaining or outstanding balance increases. IV. These percentages change over time because even though the total payment is constant the amount of interest paid each year is increasing as the remaining or outstanding balance increases. V. These percentages do not change over time; interest and principal are each a constant percentage of the total payment. Complete an amortization schedule for a $46,000 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 9% compounded annually. If an amount is zero, enter "0". Do not round intermediate calculations. Round your answers to the nearest cent. Year 1 2 3 $ Beginning Balance Payment % % % % $ % Interest %% $ b. What percentage of the payment represents interest and what percentage represents principal for each of the 3 years? Do not round intermediate calculations, Round your answers to two decimal places. % Interest % Principal Repayment of Principal Year 1: Year 2: Year 3: Why do these percentages change over time? 1. These percentages change over time because even though the total payment is constant the amount of interest paid each year is declining as the remaining or outstanding balance declines. $ Remaining Balance II. These percentages change over time because even though the total payment is constant the amount of interest paid each year is increasing as the remaining or outstanding balance declines. III. These percentages change over time because even though the total payment is constant the amount of interest paid each year is declining as the remaining or outstanding balance increases. IV. These percentages change over time because even though the total payment is constant the amount of interest paid each year is increasing as the remaining or outstanding balance increases. V. These percentages do not change over time; interest and principal are each a constant percentage of the total payment.
Expert Answer:
Related Book For
Financial management theory and practice
ISBN: 978-0324422696
12th Edition
Authors: Eugene F. Brigham and Michael C. Ehrhardt
Posted Date:
Students also viewed these accounting questions
-
Consider a $25,000 loan to be repaid in equal installments at the end of each of the next 5 years. The interest rate is 10%. a. Set up an amortization schedule for the loan. b. How large must each...
-
A firm borrows $ 25,000 from the bank at 12 percent compounded annually to purchase some new machinery. This loan is to be repaid in equal installments at the end of each year over the next 5 years....
-
a. Set up an amortization schedule for a $25,000 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 10% compounded annually. b. What percentage of...
-
Is the PS assessment a valid predictor of performance as a store manager? Would you recommend the PS be used in the future to select sales people for promotion to store manager?
-
What should be included in disaster planning for a big employer in New York City that is concerned about terrorism attacks that might shut down the company and part of the city?
-
For each scenario, determine which function of money is being described. a. Robert pays $8.00 to cross the Golden Gate Bridge. b. Liza considers which is the better deal: a desk lamp priced at...
-
The assembly consists of two 2014-T6 aluminum rods CD and EF of diameter 20 mm, an A992 steel rod AB of diameter 30 mm, and a rigid G. If the supports at A, D, and F are rigid, determine the average...
-
For the month of January, Bay Accountants worked 2,000 hours for Lake Lumber, 600 hours for Martys Marina, and 1,000 hours for the State Prison System. Bay bills clients at $120 an hour; its labor...
-
In-Class Exercise Altitude Temperature | Pressure H, ft T, F P, 20/14= -5000 74.84 1755 57.00 14.70 Troposphere Enter the data from this table. 5000 4617 12.23 10000 23.30 10.11 15000 6.55 8.30...
-
Lawrence is a 16-year-old youth who was found guilty of vandalism and assault. He was convicted of breaking into his school with two friends and writing insulting slogans on the hallway walls. He was...
-
5. The following questions refer to the grammar shown below. S A AbBbAc AbaBB B AccBb | c a. Draw the parse tree for the sentential form bacBbcc. b. List all phrases in the sentential form bacBbcc....
-
Outline three reasons schools have policies and procedures
-
Nov. 1 sold 5 0 0 lbs of apples at $ 1 . 5 0 per lbs . the customer mr ali paid half in cash and half on account. Each lbs of apples sold cost the company $ 0 . 7 3 . Complete all the journal...
-
Why is American middle class shrinking (provide three reasons)? 2. How do the forces that have led to the shrinking of the middle class impact your chance of becoming (or remaining) a member of the...
-
If SM Ltd.'s current dividend is $1 and the company is reducing dividends by 1% per year, what should the price of the stock be with a cost of capital of 8%
-
2. If 8x 30 and 8x > 0, express these in a continued inequality and find its solution. - 3. Solve the following: (0) x+1 <6 (b) 14-3x1 < 2 (c) 12x+31 5
-
Suppose that instead of buying AMR shares (The initial margin is 60% and the maintenance margin is 30%). You short sold 500 shares of TRH at $50 per share on the margin. How far can the stock go up...
-
Information graphics, also called infographics, are wildly popular, especially in online environments. Why do you think infographics continue to receive so much attention? How could infographics be...
-
What are stocks repurchases? Discuss the advantages and disadvantages of a firms repurchasing its own shares. MINI CASE Southeastern Steel Company (SSC) was formed 5 years ago to exploit a new...
-
What is the difference between the regular and discounted payback periods?
-
Assume (1) that SEC was operating at full capacity in 2004 with respect to all assets, (2) that all assets must grow proportionally with sales (3) that accounts payable and accruals will also grow in...
-
Let \[f(x, y)=\frac{1}{2} \sin (x+y), 0 \leq x, y \leq \frac{\pi}{2}\] be the joint probability density of the random vector \((X, Y)\). (1) Determine the marginal densities. (2) Are \(X\) and \(Y\)...
-
A large population of rats had been fed with individually varying mixtures of wholegrain wheat and puffed wheat to see whether the composition of the food has any influence on the lifetimes of the...
-
The random vector \((X, Y)\) is defined as follows: \(X\) is uniformly distributed in the interval \([0,10]\). On condition \(X=x\), the random variable \(Y\) is uniformly distributed in the interval...
Study smarter with the SolutionInn App