Question

sorry for the amount of photos i wanted to make sure the question and its parts were clear. im having trouble with this question, could someone find the answers and explain how they got them? Thanks!

a. Complete an amortization schedule for a $26,000 loan to be repaid in equal installments at the end of each of the next three years. The interest rate is 8% compounded annually. Round all answers to the nearest cent. Beginning Balance Repayment of Principal Ending Balance Year Payment Interest 2 $ b. What percentage of the payment represents interest and what percentage represents principal for each of the three years? Round all answers to two decimal places. % Interest % Principal Year 1: Year 2: Year 3:

Answer 1

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OPTIMAL RISKY PORTFOLIO VC AMORT SINKING JORDAN - Microsoft Excel (Product Activation Failed) Data Review View Add-Ins File Home Insert Page Layout Formulas - 2x % Cut Calibri 11 A A = = = V Wrap Text General AutoSum - A Fill 2 Sort & m Find & BIU -A E E E Merge & Center - $ % & ... Conditional Format Formatting as Table Styles Cell Styles Insert Delete Format Clear Filter Editing Select Alignment Number E Copy Paste Format Painter Clipboard F1 Д A Cells Font fix B C D E | G H I J K L M N 5 1 2 CELL REFERENCES 8 9 3 LOAN 26000 4 RATE 8% 5 YEARS 3 6 7 PMT $ 10,088.87 [=PMT(B4,B5,-B3)] BEGINNING INTEREST PORTION TO ENDING 10 YEAR A MOUNT PAYMENT PAID PRINCIPAL BALANCE 11 1 $ 26,000.00 $ 10,088.87 $ 2,080.00 $ 8,008.87 $ 17,991.13 12 2 $ 17,991.13 $ 10,088.87 $ 1,439.29 $ 8,649.58 $ 9,341.55 3 $ 9,341.55 $ 10,088.87 $ 747.32 $9,341.55 $ 14 15 b 16 YEAR % INTEREST % PRINCIPAL check total = 100% 17 20.62% 79.38% 100.00% 18 14.27% 85.73% 100.00% 19 7.41% 92.59% 100.00% 20 21 N BEST CAL BINOMIAL 2 TIME SINKING AMORTIZA Sheet2 VC JORDAN INSURANCE Sheet1 Rea ferences BEGINNING AMOUNT PAYMENT [=B3] (=B8] [=F11] (=C11] [=F12] [=C12] INTEREST PAID (=B11*B4] (=B12*B4] (=B13*B4] PORTION TO PRINCIPAL [=C11-D11] [=C12-D12] [=C13-D13] ENDING BALANCE [=B11-E11] [=B12-E12] [B13-E13] 13 % INTEREST % PRINCIPAL check total = 100% [=D11/C11] [=E11/C11] [=B17+C17] (=D12/C12] [=E12/C12] [=B18+C18] [=D13/C13] (=E13/C13] [=B19+C19] I Sheet3 Sheet4 Sheets BO! 120% _ . . . 4 O ENG 25-09-2019

OPTIMAL RISKY PORTFOLIO VC AMORT SINKING JORDAN - Microsoft Excel (Product Activation Failed) Data Review View Add-Ins File Home Insert Page Layout Formulas - 2x % Cut OF Insert Delete Format Cell Styles AutoSum - A Fill Sort & Clear Filter Editing Find & Select Cells L M N Calibri 11 A A = = = V Wrap Text General E Copy Paste B I U B- E A E E s FMerce Format Painter Merge & Center - Center $ -% % 4.0 .00 . Conditional Format Formatting as Table Clipboard Font Alignment Number Styles F42 A B C D E F G H I 23 24 25 26 C correct option: 27 these percentages change over time because though total payment is constant, the amount of interest 28 paid each year is declining as the remaining or outstanding balance declines 29 30 31 ART 32 3 33 34 35 36 37 38 39 40 41 42 43 KIM Red SINKING AMORTIZA Sheet2 VC JORDAN INSURANCE Sheet1 Sheet3 Sheet4 Sheets BEST CAL BINOMIAL 2 TIME ferences BO 120% _ . . . 4 O ENG 25-09-2019