13 Click here to read the eBook Amortized Loans AMORTIZATION

13. Click here to read the eBook: Amortized Loans AMORTIZATION SCHEDULE a. Complete an amortization schedule for a $44,000 loan to be repaid in equal installments at the end of each of the next three years. The interest rate is 9% compounded annually. Round all answers to the nearest cent. Beginning Ending Year Payment Balance 2 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 Year 3:

Solution

Loan Amount 44000 Interest 9% Years 3 Payments $17,382.41 Year Beginning balance Payment Interest Repayment of principal Balance 1 $44,000 $17,382.41 $3,960.00 $13,422.41 $30,577.59 2 $30,577.59 $17,382.41 $2,751.98 $14,630.43 $15,947.16 3 $15,947.16 $17,382.41 $1,435.24 $15,947.17 $0.00 Year % interest % principal 1 22.78% 77.22% 2 15.83% 84.17% 3 8.26% 91.74%