ngcengagecom Mathway Basic M Cengage MindTap Cengag Chegg S

ng.cengage.com Mathway | Basic M Cengage MindTap Cengag... Chegg Study Guid Questions 5. 6 Click Here To Read The Following Repr 1. You Have $8,6 Check My Work 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. Ending Beginning Balance $44,000 O$ Repayment Year $16,790.28 $3,417.30 $13,372.98 $30,627.02 2 $30,627.02$16,790.28 $2,162.80 $14,627.48 15,999.54 3 $16,790.28 0 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: 20.35% 79.65% Year 2: 12.88% Year 3: C. Why do these percentages change over time? I. 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 4.71% 4.71% 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

Solution

Option 1

Year	Beg Balance	Total Pmt	Interest	Principal Paid	End Balance
1	44,000	17,382.41	3,960.00	13,422.41	30,577.59
2	30,578	17,382.41	2,751.98	14,630.43	15,947.16
3	15,947	17,382.41	1,435.24	15,947.16	0.00