Complete Question:
A 20-year level repayment of a loan of 1000 has been scheduled. Recall that in such scenarios, as time progresses the reduction in principal part of each payment increases as the interest part of each payment decreases. The reduction in principle of the 13th payment is 50% larger than the reduction in principal of the 5th payment. What is the total amount of interest paid on the loan?
Answer:
At an assumed interest rate of 6%, the Total Interest on the Loan is:
= $743.69
Explanation:
a) Data and Calculations:
Amount of loan = $1,000
Period of loan = 20 years
Assumed interest rate = 6%
Loan Amount 1000
Loan Term
20 years 0 months
Interest Rate 6
Compound
Annually (APY)
Pay Back Every Year
Results:
Payment Every Year $87.18
Total of 20 Payments $1,743.69
Total Interest $743.69
View Amortization Table
Principal 57%
Interest 43%
Amortization Schedule
Beginning Interest Principal Ending
Balance Balance
1 $1,000.00 $60.00 $27.18 $972.82
2 $972.82 $58.37 $28.82 $944.00
3 $944.00 $56.64 $30.54 $913.46
4 $913.46 $54.81 $32.38 $881.08
5 $881.08 $52.86 $34.32 $846.76
6 $846.76 $50.81 $36.38 $810.38
7 $810.38 $48.62 $38.56 $771.82
8 $771.82 $46.31 $40.88 $730.94
9 $730.94 $43.86 $43.33 $687.61
10 $687.61 $41.26 $45.93 $641.69
11 $641.69 $38.50 $48.68 $593.00
12 $593.00 $35.58 $51.60 $541.40
13 $541.40 $32.48 $54.70 $486.70
14 $486.70 $29.20 $57.98 $428.71
15 $428.71 $25.72 $61.46 $367.25
16 $367.25 $22.04 $65.15 $302.10
17 $302.10 $18.13 $69.06 $233.05
18 $233.05 $13.98 $73.20 $159.84
19 $159.84 $9.59 $77.59 $82.25
20 $82.25 $4.93 $82.25 $0.00
