1. Johnson Enterprises borrowed $100,000 on July 1, 2003 to finance the purchase of a building. The mortgage requires payments of $3225 to be made at the end of every quarter for 15 years. The first payment is to be made on September 30th. The interest rate on the mortgage is 10%.
1. Prepare an amortization schedule for 2003 and 2004. (Remember proper format)
2. How much interest will be paid in 2004?
3. How much will the principal reduction be during 2004?
The solution explains how to prepare an amortization schedule and determine the amount of interest paid and the amount of principal reduction.