a. Complete an amortization schedule for a $19,000 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 6% compounded annually. If an amount is zero, enter "0". Do not round intermediate calculations. Round your answers to the nearest cent Beginning Balance Payment Year 1 $ Repayment of Principal Remaining Balance Interest $ 2 3 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? 1. 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.
a. Complete an amortization schedule for a $19,000 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 6% compounded annually. If an amount is zero, enter "0". Do not round intermediate calculations. Round your answers to the nearest cent Beginning Balance Payment Year 1 $ Repayment of Principal Remaining Balance Interest $ 2 3 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? 1. 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![a. Complete an amortization schedule for a $19,000 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 6% compounded
annually. If an amount is zero, enter "0". Do not round intermediate calculations. Round your answers to the nearest cent
Beginning
Balance
Year
Payment
Repayment
of Principal
Remaining
Balance
Interest
1
$
2
3
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?
1. 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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7989d58a-7af6-4c73-a4d8-3a66f200f066%2F73f845ab-c6a7-4caf-a462-78a833770b5f%2F35n3vih_processed.jpeg&w=3840&q=75)
Transcribed Image Text:a. Complete an amortization schedule for a $19,000 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 6% compounded
annually. If an amount is zero, enter "0". Do not round intermediate calculations. Round your answers to the nearest cent
Beginning
Balance
Year
Payment
Repayment
of Principal
Remaining
Balance
Interest
1
$
2
3
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?
1. 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
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 4 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education