Question

29. Your firm just acquired a bank loan in the amount of $20.000 at 6% APR. Equal payments are to be made annual at the end of each year for three years. Construct the amortize Annual Principal Reduction Interest New Principal De Year# Payment Owed $30,000.00 020 Total 30. At 10% APR. $1,000 will grow into in 500 days. It does not specify the compounding frequency, thus you use continuous compounding. Show your work) 31. You are given the Future Value of Annuity formula: FVA, = (* ), from there, derive the present Value of Annuity formula PVA . Show your algebra fully to arrive at the PVA, expression in textbook, homework or notes.

Answer 1

Using excel to explain amortization table
29

Years	Beginning Balance=30000	PMT =PMT(6%,3,-30000)	Interest part of PMT	Principal part of PMT= PMT-Interest	Ending Balance
1.00	30000.00	11223.29	1800.00	9423.29	20576.71
2.00	20576.71	11223.29	1234.60	9988.69	10588.01
3.00	10588.01	11223.29	635.28	10588.01	0.00

30.PV =1000
Rate =10%
Number of Years =500/365
FV =PV*e^(rt)=1000*e^(10%*500/365) =1146.81