Prepare an amortization schedule for a three-year loan of $57,000. The interest rate is 8 percent per year, and the loan calls f

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2 years ago

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Prepare an amortization schedule for a three-year loan of $57,000. The interest rate is 8 percent per year, and the loan calls f

or equal annual payments. How much interest is paid in the third year? How much total interest is paid over the life of the loan?

Mathematics

1 answer:

BartSMP [9] · Answer 1 · 2023-04-05T04:17:12+03:00

To repay this loan in three years we must make annual payments of $23,560.

<h3>How to calculate how much we should pay annually?</h3>

To calculate the payments that we must make each year, taking into account the 8% interest, we must carry out the following operations:

$57,000 ÷ 3 = 19,000

To calculate the interest equivalent to 8%:

$57,000 ÷ 100 = $570
$570 × 8% = $4,560

So, to calculate the total per year that we must pay, we must add both values:

$19,000 + $4,560 = $23,560

Finally, to know how much we pay in total for the interest on the loan, we multiply the value of the interest by the years that the loan lasted:

$4,560 × 3 = $13,680

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