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Construct the amortization schedule for a $15000 debt that is to be amortized in 10 quarterly...

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.

Solutions

Expert Solution

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

jeff jeffy answered 1 year ago
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