Answer:
See the explanation
Explanation:
Date Cash Interest Exp. Amortization Balance
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Jan. 1, Year 1 48,813
End of Year 1 3,600 3,417 183 48,630
End of Year 2 3,600 3,404 196 48,434
End of Year 3 3,600 3,390 210 48,224
End of Year 4 3,600 3,376 224 48,000
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Calculations:
Cash = 3,600 (Fixed amount)
Interest Exp. = 3,417 / 48,813 = 7%
End oy year 2:
Cash 3,600
Interest Expense 48,630 * 7% = 3,404
Amortization 3,600 - 3,404 = 196
End oy year 3:
Cash 3,600
Interest Expense 48,434 * 7% = 3,390
Balance 48,434 - 210 = 48,224
End oy year 4:
Cash 3,600
Amortization 3,600 - 3,376 = 224
Hope this helps!
