Question

Prepare an amortization schedule for a three-year loan of $60,000. The interest rate is 9 percent per year, and the loan calls for equal annual payments. How much total interest is paid over the life of the loan

Answer 1

Answer:

Using the excel formula to calculate the yearly payment we calculate the amount which is 23,703.29 . Base in this information we proceed to prepare the amortization schedule:

Period Initial amount  Amortización    Interest     Payment      Final Amount

1         60,000.00    18,303.29   5,400.00    23,703.29    41,696.71  

2         41,696.71   19,950.58   3,752.70     23,703.29     21,746.13  

3         21,746.13   21,746.13   1,957.15       23,703.29            -    

The total interest paid is  $ 11,109.86