Excel Online Structured Activity: Amortization schedule The data on a loan has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet a. Complete an amortization schedule for a $47,000 loan to be repaid in equal installments at the end of each of the next three years. The interest rate is 10% compounded annually. Round all answers to the nearest cent. Repayment of Principal Ending Balance Payment Interest Beginning Year Balance 1 $ 2$ $ $ $ $ $ $ $ 3 $ $ $ $ $ b. What percentage of the payment represents interest and what percentage represents principal for each of the three years? Round all answers to two decimal places. % Interest % Principal Year 1: % % Year 2: 9% % Year 3: % % c. 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. 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 1 Amortization schedule 2 3 Loan amount to be repaid (PV) 4 interest rate in 5 Length of loan in years) $47,000.00 10.00% 3 Setting up amortization table Calculation of loan payment Formula NA 9 Beginning Balance Payment Repayment of Principal Interest Romaining Balance 10 11 12 13 Year 1 2 3 15 b. Calculating of Payment Representing Interest and Principal for Each Year Payment Payment Representing Representing Check: Total 16 Your Interest Principal 100% 17 10 2 19 3 20 21 Formula + Repayment of Principal WNIA WNA WNA Remaining Balance WNIA WNIA N/A Beginning Balance Payment Interest 23 + NA NUA WNIA 24 2 WNIA WNA IN/A 25 3 MINUA WNIA UNIA 26 >> Calcutting of Payment Representing interest and Principal for Each Year Payment Payment Representing Representing 28 Check Total Year Internet 29 Principal 1 100% RA 30 WNIA 2 WNIA NA NA WNIA 32 ANIA INVA 35 35 36