. Your company is planning to borrow $300,000 now and repay it in equal installments during...

. Your company is planning to borrow $300,000 now and repay it in equal installments during the next four years at 5 percent annual interest rate to fully amortize the loan.

Calculate the equal yearly installments to fully repay the loan. Show your Work

b. Prepare a complete schedule of amortization table for this loan. Show it

in a table.

Solutions

Expert Solution

A) Amount of yearly installment = Amount borrowed /PVA 5%,4

= 300000/ 3.54595

= 84603.56

year	Amount paid	Interest	Decrease in principal amount	carrying value
1	84603.56	15000 [300000*.05]	69603.56 [84603.56-15000]	300000-69603.56= 230396.44
2	84603.56	11519.82 [230396.44*.05]	73083.74	157312.70 [230396.44-73083.74]
3	84603.56	7865.64	76737.92	80574.78
4	84603.56	4028.78	80574.78	0

jeff jeffy answered 1 year ago

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