fill out table and 2 questions on top thanks! An amortization table reports the
ID: 2742141 • Letter: F
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fill out table and 2 questions on top thanks!
An amortization table reports the amount of interest and principal contained within each regularly scheduled payment used to repay an amortized loan. The periodic (for example, monthly, quarterly, or annual) payment for an amortized loan is determined as the payment term in the formula for the calculation of the value of an annuity. present future True or False: The payments on an amortized loan contain both interest and principal. In the event that an amortized loan is to be repaid using more -frequent- than- annual payments, the calculation of the payment (PMT) Koran amortized loan requires the adjustment of both the interest rate and the number of time periods in the annuity formula. False True Your dream is coming true! You are about to complete the purchase of your first home. To do so, you will borrow 5220,000 from a savings and loan association that requires an interest rate of 4.00% on your loan. To simplify your workload, assume that you will repay your mortgage loan over the next four years by making annual payments at the end of each year. Complete the following loan amortization table by selecting the correct answers:Explanation / Answer
Solution :
An amortisation table reports the amount of interest and principal contained within each regularly payment scheduled payment used to repay an amortised loan.
The periodic payment for an amortised loan is determined as the payment term in the formula for the calculation of the future value of an annuity. (as we calculates future value of loan taken.
The payment of an amortised loan contains both interest and principal. In the event that an amortised loan is to be repaid using more frequent than an annual payment , the calculation of the payment for an amortised loan requires the adjustment both interest rate and the number of time period in the annuity formula.
True because when calculating amortised amount we divide the interest rate by frequency of payment in a year and multiply the period by frequency in a year
Amortisation schedule :
YEAR
BEGINIG AMOUNT
PAYMENT**
INTERET
REPAYMENT OF PRINCIPAL
ENDING BALANCE
a
b
C
d=b*4%
e=c-d
f=b-e
1
220,000.00
60,607.81
8,800.00
51,807.81
168,192.19
2
168,192.19
60,607.81
6,727.69
53,880.12
114,312.07
3
114,312.07
60,607.81
4,572.48
56,035.33
58,276.74
4
58,276.74
60,607.81
2,331.07
58,276.74
0.00
**Annual Payment = P*r / (1-(1+r)^-n)
P=PRINCIPAL , r=INTEREST RATE, n=PERIOD
=220000*0.04 / (1+(1+0.04)^-4)
=60607.81
An amortisation table reports the amount of interest and principal contained within each regularly payment scheduled payment used to repay an amortised loan.
The periodic payment for an amortised loan is determined as the payment term in the formula for the calculation of the future value of an annuity. (as we calculates future value of loan taken.
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