Question

repare an amortization schedule for a five-year loan of $45,000. The interest rate is 8% per year, and the loan calls for equal annual payments. (Do not round intermediate calculations. Enter all amount as positive value. Round the final answers to 2 decimal places. Leave no cells blank - be certain to enter "0" wherever required.)

Year	Beginning Balance	Total Payment	Interest Payment	Principal Payment	Ending Balance
1	$	$	$	$	$
2
3
4
5

How much interest is paid in the third year? (Do not round intermediate calculations. Round the final answer to 2 decimal places.)

Interest paid           $

How much total interest is paid over the life of the loan? (Do not round intermediate calculations. Round the final answer to 2 decimal places.)

Total interest           $

Answer 1

Year 1) 1 2 3 4 5 Beginning Total Interest Principal Ending balance Payment payment payment balance (a) (b) (c=a * 8%) (d=b-c) (e = a -d) $45,000.00 $11.270.54 $3,600.00 $7,670.54 $37,329.46 $37,329.46 $11,270.54 $2.986.36 $8,284.18 $29,045.28 $29.045.28 $11.270.54 $2.323.62 $8.946.92 $20.098.36 $20.098.36 $11,270.54 $1.607.87 $9,662.67 $10.435.69 $10,435.69 $11.270.54 $834.86 $10,435.68 $0.00 Workings: The eaqual annual paymenton the loan: Annuity = Present value / Present value of annuity due = $45,000/3.99271 = $11,270.54 Note: Present value of Annuity due (n = 5 periods, i = 8%) 3.99271 2) The interest is paid in the third year: Interest Paid $2,323.62 3) The total interest is paid over the life of the loan: Total Interest $11,352.70