a. Complete an amortization schedule for a $11,000 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. If an amount is zero, enter "0". Do not round intermediate calculations. Round your answers to the nearest cent. Year Beginning Balance 1 2 3 Payment Interest Repayment of Principal Remaining Balance b. What percentage of the payment represents interest and what percentage represents principal for each of the 3 years? Do not round intermediate calculations. Round your answers to two decimal places. % Interest % Principal Year 1: % % Year 2: Year 3: % % % % 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. Select-v

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 12P
icon
Related questions
Question
not use ai please
a. Complete an amortization schedule for a $11,000 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. If
an amount is zero, enter "0". Do not round intermediate calculations. Round your answers to the nearest cent.
Year
Beginning
Balance
1
2
3
Payment
Interest
Repayment
of Principal
Remaining
Balance
b. What percentage of the payment represents interest and what percentage represents principal for each of the 3 years? Do not round intermediate calculations. Round your
answers to two decimal places.
% Interest
% Principal
Year 1:
%
%
Year 2:
Year 3:
%
%
%
%
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.
Select-v
Transcribed Image Text:a. Complete an amortization schedule for a $11,000 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 8% compounded annually. If an amount is zero, enter "0". Do not round intermediate calculations. Round your answers to the nearest cent. Year Beginning Balance 1 2 3 Payment Interest Repayment of Principal Remaining Balance b. What percentage of the payment represents interest and what percentage represents principal for each of the 3 years? Do not round intermediate calculations. Round your answers to two decimal places. % Interest % Principal Year 1: % % Year 2: Year 3: % % % % 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. Select-v
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning