Question

construct a 10 year amortizing loan table with 8% interest rate. You borrow $30,000 initially and repay it in your ten equal annual year-end payments. Show only the first three years.

Answer 1

Payment=Loan*rate/(1-1/(1+rate)^loan term)=30000*8%/(1-1/1.08^10)=4470.88

Interest payment=Loan beginning balance*rate

Principal payment=Payment-Interest payment

Loan ending balance=Loan beginning balance-Principal payment

Payment	Loan beginning balance	Payment	Interest payment	Principal payment	Loan ending balance
1	30000	$4,470.88	$2,400.00	$2,070.88	$27,929.12
2	$27,929.12	$4,470.88	$2,234.33	$2,236.56	$25,692.56
3	$25,692.56	$4,470.88	$2,055.40	$2,415.48	$23,277.08
4	$23,277.08	$4,470.88	$1,862.17	$2,608.72	$20,668.36
5	$20,668.36	$4,470.88	$1,653.47	$2,817.42	$17,850.95
6	$17,850.95	$4,470.88	$1,428.08	$3,042.81	$14,808.14
7	$14,808.14	$4,470.88	$1,184.65	$3,286.23	$11,521.90
8	$11,521.90	$4,470.88	$921.75	$3,549.13	$7,972.77
9	$7,972.77	$4,470.88	$637.82	$3,833.06	$4,139.71
10	$4,139.71	$4,470.88	$331.18	$4,139.71	$0.00