Gingerbread Corp was issued a $220,000 loan at 6%. The amortization schedule created by the company accountant is presented below.   If Gingerbread Corp decided to pay off the entire principle balance left on the loan of $119,590 at the end of period 3 how much would the company save in interest expense? Interest expense saved ?

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A:

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A: Option B is the correct answer.

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A: Following is the answer to the given question

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Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.