Question

7. Construct a LOAN AMORTIZATION schedule for a 3 year 5% loan of $100, 000.

Please show your calculations clearly and include calculated answers in the table below.

(Please only do this question if you are certain how to do it)

Amortization Schedule for a Loan of $100 000 Repaid Over 3 Years at 5%

Year	Payment amount	Interest Paid	Principal repaid	Outstanding loan balance
0
1
2
3

Answer 1

first, we need to find a yearly payment

L=100000

r=5% = 0.05

t=3 years

.............yearly payment

..

.

.

for the first year, interest paid is

p=100000

r=5% = 0.05

t= 1 year

................interest paid

.

.

for the first year, the principal paid is

.

.

the unpaid balance (Outstanding loan balance) is

.

.

.

.

.

.

for the second year, interest paid is

U₁= 68279.14

r=5% = 0.05

t= 1 year

................interest paid

.

.

for the first year, the principal paid is

.

.

the unpaid balance (Outstanding loan balance) is

.

.

.

.

.

.

.

.

for the second year, interest paid is

U₂= 34972.24

r=5% = 0.05

t= 1 year

................interest paid

.

.

for the first year, the principal paid is

.

.

the unpaid balance (Outstanding loan balance) is

.

.

now make a table

0				100000
1	36720.86	5000	31720.86	68279.14
2	36720.86	3413.96	33306.9	34972.24
3	36720.86	1748.61	34972.24	0