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In: Finance

Watkins Technology is purchasing computer software at a cost of $23,000. They are putting a down...

Watkins Technology is purchasing computer software at a cost of $23,000. They are putting a down payment of $3,000 and will borrow the remainder. They will amortize the loan for the software in equal 48 monthly installments at an interest rate of 14%. Prepare an amortization schedule for the first two payments. SHOW ALL WORK!

                                                                                                                       

Payment

Number

Amount of Payment

Interest for

Period

Portion to Principal

Principal Balance at End of Period

0

1

2

Solutions

Expert Solution

Loan amount $20,000
Loan term (in years) 4
Interest rate 14.00%
Payment frequency 12.00
Monthly Loan payment $546.53
Payment number Amount of payment Interest for period Portion to principal Principal balance at end of period
0 $20,000
1 $546.53 $233.33 $313.20 $19,686.80
2 $546.53 $229.68 $316.85 $19,369.95
Total $1,093.06 $463.01 $630.05

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