Instructions

It is important to know how to build an amortization schedule when firms (or individuals) take out bank loans. It all starts with calculating the monthly payment using the formula below. For the example shown in Table 22-1 and using the formula provided, do you own calculations to confirm the monthly payment for that loan based on the following information (hint: you need to get $1,992.86):

Loan amount (P): $60,000

Number of periods (n): 3 years = 36 months

Interest (i): 12% per year = 1% per month (should be expressed as 0.01)