You are taking an interest-only $10,000 loan. The loan is to be paid in two years...

You are taking an interest-only $10,000 loan. The loan is to be paid in two years and carries monthly interest payments of 0.5%

1. Show amortization table for the loan.

2. What is the outstanding balance of the loan at any month?

Expert Solution

	Rate per month	0.50%
	Number of payments	24
No of Periods	Principal At the beginning	PMT(0.50%,24,-10000)	Interest part of PMT= Principal * Interest rate	Principal Part of PMT=PMT-Interest	Ending Principal or Outstanding balance = Beginning Principal - Principla Part of PMT
1	10000	443.21	50	393.21	9606.79
2	9606.79	443.21	48.03396949	395.17	9211.62
3	9211.62	443.21	46.05810882	397.15	8814.47
4	8814.47	443.21	44.07236885	399.13	8415.34
5	8415.34	443.21	42.07670019	401.13	8014.21
6	8014.21	443.21	40.07105317	403.14	7611.08
7	7611.08	443.21	38.05537793	405.15	7205.92
8	7205.92	443.21	36.0296243	407.18	6798.75
9	6798.75	443.21	33.99374191	409.21	6389.54
10	6389.54	443.21	31.94768011	411.26	5978.28
11	5978.28	443.21	29.891388	413.31	5564.96
12	5564.96	443.21	27.82481442	415.38	5149.58
13	5149.58	443.21	25.74790798	417.46	4732.12
14	4732.12	443.21	23.66061701	419.55	4312.58
15	4312.58	443.21	21.56288958	421.64	3890.93
16	3890.93	443.21	19.45467352	423.75	3467.18
17	3467.18	443.21	17.33591637	425.87	3041.31
18	3041.31	443.21	15.20656544	428.00	2613.31
19	2613.31	443.21	13.06656776	430.14	2183.17
20	2183.17	443.21	10.91587008	432.29	1750.88
21	1750.88	443.21	8.754418922	434.45	1316.43
22	1316.43	443.21	6.582160504	436.62	879.81
23	879.81	443.21	4.399040794	438.81	441.00
24	441.00	443.21	2.205005485	441.00	0.00

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jeff jeffy answered 2 years ago

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