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Loan amortization schedule

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Loan amortization schedule 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.

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.

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Solution Summary

Solution explains the steps for calculating EMI for a given loan. It also explains making loan amortization schedule.

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Please refer attached solution for complete details. Tables and formulas nay not print here properly.

Solution:

A)Calculate the annual, end-of-year loan payment.
We know

Annual End of year payment is $6460.97

B)Prepare a loan amortization schedule showing the interest and ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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