Homework Answers
Annaul Instalment = Loan Amount / PVAF(r%, n)
PVAF(r%, n) = Sum of PVF(r%, n)
PVF(r%, n) = 1 / (1+r)^n
Annaul Instalment = Loan Amount / PVAF(r%, n)
= $2,000,000 / 7.3601
= $ 271,735.92
Amortization Schedule:
| Year | Opening Balance | Annual Payment | Annual Int | Principal repay | Ending Balnce |
| 1 | $ 20,00,000.00 | $ 2,71,735.92 | $ 1,20,000.00 | $ 1,51,735.92 | $ 18,48,264.08 |
| 2 | $ 18,48,264.08 | $ 2,71,735.92 | $ 1,10,895.85 | $ 1,60,840.07 | $ 16,87,424.01 |
| 3 | $ 16,87,424.01 | $ 2,71,735.92 | $ 1,01,245.44 | $ 1,70,490.48 | $ 15,16,933.54 |
| 4 | $ 15,16,933.54 | $ 2,71,735.92 | $ 91,016.01 | $ 1,80,719.90 | $ 13,36,213.63 |
| 5 | $ 13,36,213.63 | $ 2,71,735.92 | $ 80,172.82 | $ 1,91,563.10 | $ 11,44,650.53 |
| 6 | $ 11,44,650.53 | $ 2,71,735.92 | $ 68,679.03 | $ 2,03,056.88 | $ 9,41,593.65 |
| 7 | $ 9,41,593.65 | $ 2,71,735.92 | $ 56,495.62 | $ 2,15,240.30 | $ 7,26,353.35 |
| 8 | $ 7,26,353.35 | $ 2,71,735.92 | $ 43,581.20 | $ 2,28,154.72 | $ 4,98,198.64 |
| 9 | $ 4,98,198.64 | $ 2,71,735.92 | $ 29,891.92 | $ 2,41,844.00 | $ 2,56,354.64 |
| 10 | $ 2,56,354.64 | $ 2,71,735.92 | $ 15,381.28 | $ 2,56,354.64 | $ -0.00 |
Pls comment, if any further assistance is required.
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