Question

In: Accounting

You borrowed $45,000 at 4% annual interest rate that you must repay over 3 years. The...

You borrowed $45,000 at 4% annual interest rate that you must repay over 3 years. The loan is amortized into three-equal end-of-year payments.

        (a) Calculate annual payment amount

        (b) Prepare a loan amortization schedule

        (c) If you make equal monthly payment for 36 months, calculate monthly payment amount and prepare a monthly loan amortization schedule

       (d) How much is total interest charge for 3 years, if you make annual payment? How much is total interest charge for 36 months, if you make monthly payment? Do you pay more interest with annual payment or monthly payment? Why?

Solutions

Expert Solution

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.


Related Solutions

  Joan Messineo borrowed 42,000 at a 5​% annual rate of interest to be repaid over 3...
  Joan Messineo borrowed 42,000 at a 5​% annual rate of interest to be repaid over 3 years. The loan is amortized into three​ equal, annual,​ end-of-year payments. a.  Calculate the​ annual, end-of-year loan payment. b.  Prepare a loan amortization schedule showing the interest and principal breakdown of each of the three loan payments. c. Explain why the interest portion of each payment declines with the passage of time.
Joan Messineo borrowed $15,000 at a 14% annual rate of interest to be repaid over 3...
Joan Messineo borrowed $15,000 at a 14% annual rate of interest to be repaid over 3 years. The loan is amortized into three equal, annual, end-of-year payments. (i) Calculate the annual, end-of-year loan payment. (ii) Prepare a loan amortization schedule showing the interest and principal breakdown of each of the three loan payments. (iii) Explain why the interest portion of each payment declines with the passage of time.
Joan Messineo borrowed ?$19,000 at a 9?% annual rate of interest to be repaid over 3...
Joan Messineo borrowed ?$19,000 at a 9?% annual rate of interest to be repaid over 3 years. The loan is amortized into three? equal, annual,? end-of-year payments. a.Calculate the? annual, end-of-year loan payment. b.Prepare a loan amortization schedule showing the interest and principal breadown of each of the three loan payments. c. Explain why the interest portion of each payment declines with the passage of time.
Joan Messineo borrowed $10,000 at a 17% annual rate of interest to be repaid over 3...
Joan Messineo borrowed $10,000 at a 17% annual rate of interest to be repaid over 3 years. The loan is amortized into three equal, annual, end-of-year payments. a. Calculate the annual, end-of-year loan payment b. Prepare a loan amortization schedule showing the interest and principal breakdown of each of the three loan payments. c. Explain why the interest portion of each payment declines with the passage of time.
If you borrowed $30,000 at 25% annual interest. You agreed to repay the loan with five...
If you borrowed $30,000 at 25% annual interest. You agreed to repay the loan with five equal annual payments. How much of the total amount repaid is interest? How much of the third annual payment is interest, and how much principal is there? If you decided to pay off your loan after the third payment, how much will you pay? please i want the result step by step by hand not using excel! thanks in advance
If you borrowed 24000 at 6% annual interest. You agreed to repay the loan with five...
If you borrowed 24000 at 6% annual interest. You agreed to repay the loan with five equal annual payments. How much of the total amount repaid is interest? How much of the third annual payment is interest, and how much principal is there? If you decided to pay off your loan after the third payment, how much will you pay?
Suppose you borrowed $50,000 at a rate of 8.5% and must repay it in5 equal...
Suppose you borrowed $50,000 at a rate of 8.5% and must repay it in 5 equal installments at the end of each of the next 5 years. By how much would you reduce the amount you owe in the first year?
Suppose you borrowed $50,000 at a rate of 8.5% and must repay it in 5 equal...
Suppose you borrowed $50,000 at a rate of 8.5% and must repay it in 5 equal installments at the end of each of the next 5 years. By how much would you reduce the amount you own in the first year?
You borrow $10,000 on 1/1/2020, at the annual interest rate of 4%, and will repay in...
You borrow $10,000 on 1/1/2020, at the annual interest rate of 4%, and will repay in 10 annual installments, beginning on 12/31/2020, and continuing at the end of each year for subsequent years.  The installments are not level, but will increase at an annual rate of 3% with the first payment of $x.  Thus, the second payment will be $x(1.03), the third payment will be $x(1.03)2, etc. (a)        Calculate $x. (b)       What is the total amount of payments?  (Just add the payments, without interest.) (c)        What...
If you borrow $20,000, you have to repay in equal instalments over four years. Interest Rate...
If you borrow $20,000, you have to repay in equal instalments over four years. Interest Rate is 9%. What is the interest payment in the fourth year, 14. a) 1499 b)1171 c)510 d)977 e)1406 f)814
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT