Question

In: Finance

Loan Amortization Schedule for Investment Interest rate Year Beginning Principal Principal Payment Interest Payment Ending principal...

Loan Amortization Schedule for Investment

Interest rate	Year	Beginning Principal	Principal Payment	Interest Payment	Ending principal	Tax Savings
0.07	1	15,000	a.	1,050	b.	c.
0.07	2
0.07	3
0.07	4
0.07	5
0.07

Fill in the blanks. Explain how to get the principal and ending principal.

Expert Solution

First you need to calculate the yearly payment

Present value of Annuity = A*[(1-(1+r)^-n)/r]

Where

A - Annuity payment = ?

r - rate per period = 7%

n - no. of periods = 5

15000 = A*[(1-1.07^-5)/.07]

= A*[(1-0.71298617948)/.07]

= A*4.100197436

A = 15000/4.100197436

= 3658.36

Year	Opening Balance	Total Payment	interest paid	principal paid	end balance
1	15,000.00	3,658.36	1,050.00	2,608.36	12,391.64
2	12,391.64	3,658.36	867.41	2,790.95	9,600.69
3	9,600.69	3,658.36	672.05	2,986.31	6,614.38
4	6,614.38	3,658.36	463.01	3,195.35	3,419.03
5	3,419.03	3,658.36	239.33	3,419.03	0.00

Interest paid = Opening Balance*7%

Principal paid = Total Payment - Interest paid

End balance = Opening Balance - Principal paid

jeff jeffy answered 1 year ago

Loan Amortization Schedule, $80,000,000 at 8% for 15 years Year Beginning Amount Payment Interest Payment of...

Loan Amortization Schedule, $80,000,000 at 8% for 15 years Year Beginning Amount Payment Interest Payment of Principal Ending Balance 1 $ 80,000,000.00 $ 1,933.28 $ 533,333.33 $ (531,400.05) $ 80,531,400.05 2 $ 80,531,400.05 $ 1,933.28 $ 536,876.00 $ (534,942.72) $ 81,066,342.77 3 $ 81,066,342.77 $ 1,933.28 $ 540,442.29 $ (538,509.01) $ 81,604,851.78 4 $ 81,604,851.78 $ 1,933.28 $ 544,032.35 $ (542,099.07) $ 82,146,950.84 179 $ 260,404,969.06 $ 1,933.28 $ 1,736,033.13 $ (1,734,099.85) $ 262,139,068.91 180 $ 262,139,068.91 $ 1,933.28 $ ...

Blended payment loans require a loan amortization schedule separating principal and interest. This is required, in...

Blended payment loans require a loan amortization schedule separating principal and interest. This is required, in part, because A) interest only is reflected on the cash flow statement. B) interest and principal needs to be reflected under current and not current liabilities section of the statement of financial positon. C) the interest expense is recorded separately from the reduction of the loan payable. D) none of the above.

calculate a loan amortization schedule for a $10,000 loan, 5% annual interest, one payment a year...

calculate a loan amortization schedule for a $10,000 loan, 5% annual interest, one payment a year for 10 years, starting on 1/1/2010. All calculations must be shown, i.e., do not use a “package” to complete this question. Loan period starts from 1/1/2010. I mean the first payment is to be made on 1/1/2010.

a)Prepare an amortization schedule for a 10-year loan of $300,000. The interest rate is 12% and...

a)Prepare an amortization schedule for a 10-year loan of $300,000. The interest rate is 12% and the loan calls for equal payments. How much interest is paid in the fifth year? How much interest is paid over the life of the loan? b)What is the present value of $2,625 per year at a discount rate of 8%, if the first payment is received six years from now and the last payment is received 20 years from now?

Develop an amortization schedule for a 5-year loan of $25,000 at an interest rate of 7.5%,...

Develop an amortization schedule for a 5-year loan of $25,000 at an interest rate of 7.5%, assuming equal annual installments at the end of each year. Use the same format that we used in class. Please show work in Excel

What does an amortization schedule show? The portion of payment broken down to interest and principal...

What does an amortization schedule show? The portion of payment broken down to interest and principal The increase in loan outstanding The increase to principal The balance of interest outstanding

Prepare an amortization schedule for a three-year loan of $111,000. The interest rate is 10 percent...

Prepare an amortization schedule for a three-year loan of $111,000. The interest rate is 10 percent per year, and the loan calls for equal annual payments. How much total interest is paid over the life of the loan? (Leave no cells blank. Enter '0' where necessary. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Year Beginning Balance Total Payment Interest Payment Principal Payment Ending Balance 1 $ 111000 $ $ $ $ 2...

Prepare an amortization schedule for a five-year loan of $84,000. The interest rate is 8% per...

Prepare an amortization schedule for a five-year loan of $84,000. The interest rate is 8% per year and the loan calls for equal annual payments. How much interest is paid in the third year? How much total interest is paid over the life of the loan? Provide another amortization schedule if you must pay $8,400 toward the principle each year instead of equal annual payments. How much interest is paid in the third year? Explain why the third year interest...

Prepare an amortization schedule for a five-year loan of $55,000. The interest rate is 8 percent...

Prepare an amortization schedule for a five-year loan of $55,000. The interest rate is 8 percent per year, and the loan calls for equal annual payments. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Leave no cells blank - be certain to enter "0" wherever required.) Year Beginning Balance Total Payment Interest Payment Principal Payment Ending Balance 1 $ $ $ $ $ 2 3 4 5 How...

Amortization with Equal Payments. Prepare an amortization schedule for a three-year loan of $57,000. The interest...

Amortization with Equal Payments. Prepare an amortization schedule for a three-year loan of $57,000. The interest rate is 8 percent per year, and the loan calls for equal annual payments. How much interest is paid in the third year? How much total interest is paid over the life of the loan?