Consider a 4-year amortizing loan. You borrow $2,400 initially and repay it in four equal annual year-end payments. a. If the interest rate is 10%, what is the annual payment? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Annual payment $ b. Prepare an amortization schedule. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Leave no cells blank - be certain to enter "0" wherever required. Time 0 1 ✓Answer is complete and correct. 757.13 2 3 4 Loan Balance ($) Answer is complete but not entirely correct. Year-End Interest Due on Loan Balance ($) 2,400.00 0 2,400.00 1,882.87 1,314.03 688 x 240.00 188.29 131.40 68.83 Total Year- End Payment ($) 0 757.13 757.13 757.13 757.13 Amortization of Loan (S) 0 517.13 568.84 625.73 688.30 S
Consider a 4-year amortizing loan. You borrow $2,400 initially and repay it in four equal annual year-end payments. a. If the interest rate is 10%, what is the annual payment? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Annual payment $ b. Prepare an amortization schedule. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Leave no cells blank - be certain to enter "0" wherever required. Time 0 1 ✓Answer is complete and correct. 757.13 2 3 4 Loan Balance ($) Answer is complete but not entirely correct. Year-End Interest Due on Loan Balance ($) 2,400.00 0 2,400.00 1,882.87 1,314.03 688 x 240.00 188.29 131.40 68.83 Total Year- End Payment ($) 0 757.13 757.13 757.13 757.13 Amortization of Loan (S) 0 517.13 568.84 625.73 688.30 S
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Consider a 4-year amortizing loan. You borrow $2,400 initially and repay it in four equal annual year-end payments.
a. If the interest rate is 10%, what is the annual payment?
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
Annual payment $
✓Answer is complete and correct.
Time
b. Prepare an amortization schedule.
Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Leave no cells blank - be certain to
enter "0" wherever required.
1
2
3
4
Loan Balance
(S)
2,400.00
2,400.00
757.13
1,882.87 x
1,314.03
688
Answer is complete but not entirely correct.
Year-End
Interest Due
on Loan
Balance (5)
240.00
188.29
131.40
68.83
Total Year-
End Payment
($)
10
757.13
757.13
757.13
757.13
Amortization
of Loan (S)
0
517.13
568.84
625.73
688.30
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