Answer:
we must first determine the annual payment:
annual payment = present value / annuity factor
present value = $25,000
PV annuity factor, 10%, 3 periods = 2.4869
annual payment = $25,000 / 2.48685 = $10,052.87
year payment interest paid principal paid ending balance
1 $10,052.87 $2,500 $7,552.87 $17,447.13
2 $10,052.87 $1,744.71 $8,308.16 $9,138.97
3 $10,052.87 $913.90 $9,138.97 $0
in percentages:
year payment interest paid principal paid
1 100% 25% 75%
2 100% 17.36% 82.64%
3 100% 9.09% 90.91%
