Problem $8$

Jody Mitchell borrowed $$55,000$ at a $5\%$ annual rate of interest that she must repay over $3$ years. The loan is amortized into three equal,

end$-$of$-$year payments.

a$.$ Calculate the end$-$of$-$year loan payment.

b$.$ Prepare a loan amortization schedule showing the interest and principal breakdown of each of the three loan payments.

c$.$ Explain why the interest portion of each payment declines with the passage of time.

Answers $($insert your answers in the highlighted cells; use cell references, equations, and functions wherever possible$)$

a$.$

Number of years

Annual interest rate

Loan amount

Annual payment

b$.$

c$.$