Question

Construct the amortization schedule for a $15000 debt that is to be amortized in 10 quarterly payments at 3% interest per quarter on the unpaid balance.

Answer 1

Quarterly Loan Payment

Loan Amount (P) = $15,000

Quarterly Interest Rate (n) = 3.00% per Quarter

Number of period (n) = 10 Quarters

Quarterly Loan Payment = [P x {r (1+r)ⁿ} ] / [( 1+r)ⁿ – 1]

= [$15,000 x {0.03 x (1 + 0.03)¹⁰}] / [(1 + 0.03)¹⁰ – 1]

= [$15,000 x {0.03 x 1.343916}] / [1.343916 – 1]

= [$15,000 x 0.040317] / 0.343916

= $1,758.46 per Quarter

Quarter	Beginning Loan Amount	Quarterly Payment	Interest Paid at 3%	Repayment of Principal	Ending Loan Balance
1	15,000.00	1,758.46	450.00	1,308.46	13,691.54
2	13,691.54	1,758.46	410.75	1,347.71	12,343.83
3	12,343.83	1,758.46	370.31	1,388.15	10,955.68
4	10,955.68	1,758.46	328.67	1,429.79	9,525.89
5	9,525.89	1,758.46	285.78	1,472.68	8,053.21
6	8,053.21	1,758.46	241.60	1,516.86	6,536.34
7	6,536.34	1,758.46	196.09	1,562.37	4,973.97
8	4,973.97	1,758.46	149.22	1,609.24	3,364.73
9	3,364.73	1,758.46	100.94	1,657.52	1,707.22
10	1,707.22	1,758.46	51.22	1,707.22	0.00