123453 Loan amount to be repaid (PV)Interest rate (r)Length of loan (in years)678910 112 13 14 1516171819202122232425AAmortization schedule28293031323324a. Setting up amortization tableCalculation of loan paymentYear123FormulasYear123Year1233b. Calculating % of Payment Representing Interest and Principal for Each YearYear12BWN$42,000.009.00%33Beginning BalancePayment %RepresentingInterestBeginning Balance#N/A#N/A#N/Aс2627 b. Calculating % of Payment Representing Interest and Principal for Each YearFormula#N/APayment %RepresentingInterest#N/A#N/A#N/APaymentPayment %RepresentingPrincipalPayment#N/A#N/A#N/APayment %RepresentingPrincipal#N/A#N/A#N/ADInterestCheck: Total =100%Interest#N/A#N/A#N/ACheck: Total =100%#N/A#N/A#N/AERepayment ofPrincipalRepayment ofPrincipal#N/A#N/A#N/AFRemaining BalanceRemaining Balance#N/A#N/A#N/AG Excel Online Structured Activity: Amortization scheduleThe data on a loan has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.XOpen spreadsheeta. Complete an amortization schedule for a $42,000 loan to be repaid in equal installments at the end of each of the next three years. The interest rate is 9% compounded annually. Round all answers to the nearest cent.Year123Year 1:Year 2:Year 3:I$$$BeginningBalance|||IVV% Interest%heck My Work$$%Paymentb. 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.% Principal%Reset Problem%$$$%Interest$$$Repaymentof Principal$c. Why do these percentages change over time?I. These percentages change over time because even though the total payment is constant the amount of interest paid each year is declining as the remaining or outstanding balance declines.II. These percentages change over time because even though the total payment is constant the amount of interest paid each year is increasing as the remaining or outstanding balance declines.III. These percentages change over time because even though the total payment is constant the amount of interest paid each year is declining as the remaining or outstanding balance increases.IV. These percentages change over time because even though the total payment is constant the amount of interest paid each year is increasing as the remaining or outstanding balance increases.V. These percentages do not change over time; interest and principal are each a constant percentage of the total payment.$$EndingBalance

Usually when you take a loan you have to make a fixed periodic payment in each period. Here the…

zation schedule The data on a loan has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet a. Complete an amortization schedule for a $42,000 loan to be repaid in equal installments at the end of each of the next three years. The interest rate is 9% compounded annually. Round all answers to the Ending Balance Year 1 $ 2 $ 3 $ Year 1: Year 2: Year Beginning Balance Activity % Interest % % $ % $ $ Payment % Principal % 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. % % $ $ $ c. Why do these percentages change over time? Interest $ $ $ Repayment. of Principal $ $ $

zation schedule The data on a loan has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet a. Complete an amortization schedule for a $42,000 loan to be repaid in equal installments at the end of each of the next three years. The interest rate is 9% compounded annually. Round all answers to the Ending Balance Year 1 $ 2 $ 3 $ Year 1: Year 2: Year Beginning Balance Activity % Interest % % $ % $ $ Payment % Principal % 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. % % $ $ $ c. Why do these percentages change over time? Interest $ $ $ Repayment. of Principal $ $ $

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 20P

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