Answer:
Year 1 $15000
Interest $1,200
<u>repayment $5,820.50</u>
Year 2 $10,379.50
Interest $830.36
<u>repayment $5,820.50</u>
Year 3 $5,389.36
Interest $431.15
<u>repayment $5,820.50</u>
Closing balance $0
Explanation:
Year 1 Interest = $15,000 * 8% = $1,200
Closing balance at the end of year 1 = $15,000 (loan principal) + $1,200(interest) - $5,820.50 = $10,379.50
Year 2 Interest = $10,379.50 * 8% = $830.36
Closing balance at the end of year 2 = $10,379.50 (opening balance prior year) + $830.36 (interest) - $5,820.50 = $5,389.36
Year 3 Interest = $5,389.36 * 8% = $431.15
Closing balance at the end of year 3 = $5,389.36 (opening balance prior year) + $431.15 (interest) - $5,820.50 = 0
