Question

This exercise is designed to be solved using technology such as calculators or computer spreadsheets.

You borrow $18,000 with a term of four years at an APR of 8%. Make an amortization table. How much equity have you built up halfway through the term? (Round your answer to two decimal places.)

Answer 1

Given, Initial pricipal (P) = $18000

Interest rate per month (r) = (8/12)%

Total number of payments (n) = 4*12 = 48

Therefore, payment amount per year = Pr(1+r)⁴⁸/[(1+r)⁴⁸-1]

= ${18000*(8/1200)*(1+8/1200)⁴⁸/[(1+8/100)⁴⁸-1]}

= $439.43

Payment	Amount	Interest	Principal	Balance
				$18000
1	$439.43	$120	$319.43	$17680.57
2	$439.43	$117.87	$321.56	$17359.01
3	$439.43	$115.73	$323.70	$17035.31
4	$439.43	$113.57	$325.86	$16709.45
5	$439.43	$111.40	$328.03	$16381.42
6	$439.43	$109.21	$330.22	$16051.20
7	$439.43	$107.01	$332.42	$15718.78
8	$439.43	$104.79	$334.64	$15384.14
9	$439.43	$102.56	$336.87	$15047.27
10	$439.43	$100.32	$339.11	$14708.16
11	$439.43	$98.05	$341.38	$14366.78
12	$439.43	$95.78	$343.65	$14023.13
13	$439.43	$93.49	$345.94	$13677.19
14	$439.43	$91.18	$348.25	$13328.94
15	$439.43	$88.86	$350.57	$12978.37
16	$439.43	$86.52	$352.91	$12625.46
17	$439.43	$84.17	$355.26	$12270.20
18	$439.43	$81.80	$357.63	$11912.57
19	$439.43	$79.42	$360.01	$11552.56
20	$439.43	$77.02	$362.41	$11190.15
21	$439.43	$74.60	$364.83	$10825.32
22	$439.43	$72.17	$367.26	$10458.06
23	$439.43	$69.72	$369.71	$10088.35
24	$439.43	$67.26	$372.17	$9716.18
25	$439.43	$64.77	$374.66	$9341.52
26	$439.43	$62.28	$377.15	$8964.37
27	$439.43	$59.76	$379.67	$8584.70
28	$439.43	$57.23	$382.20	$8202.50
29	$439.43	$54.68	$384.75	$7817.75
30	$439.43	$52.12	$387.31	7430.44
31	$439.43	$49.54	$389.89	$7040.55
32	$439.43	$46.94	$392.49	$6648.06
33	$439.43	$44.32	$395.11	$6252.95
34	$439.43	$41.69	$397.74	$5855.21
35	$439.43	$39.03	$400.40	$5454.81
36	$439.43	$36.36	$403.07	$5051.74
37	$439.43	$33.68	$405.75	$4645.99
38	$439.43	$30.97	$408.46	$4237.53
39	$439.43	$28.25	$411.18	$3826.35
40	$439.43	$25.51	$413.92	$3412.43
41	$439.43	$22.75	$416.68	$2995.75
42	$439.43	$19.97	$419.46	$2576.29
43	$439.43	$17.18	$422.25	$2154.04
44	$439.43	$14.36	$425.07	$1728.97
45	$439.43	$11.53	$427.90	$1301.07
46	$439.43	$8.67	$430.76	$870.31
47	$439.43	$5.80	$433.63	$436.68
48	$439.43	$2.91	$436.52	$0.16