## Question

###### Loan amortization schedule Personal Finance Problem Joan Messineo borrowed $46,000 at a 4% annual rate of...

Loan amortization schedule Personal Finance Problem Joan Messineo borrowed $46,000 at a 4% annual rate of interest to be repaid over 3 years. The loan is amortized into three equal, annual end-of-year payments Calculate the annual end of year loan payment b. Prepare a loan amortization schedule showing the interest and principal breakdown of each of the three loan payments. c. Explain why the interest portion of each payment declines with the passage of time. a. The amount of the equal, annual, end-of-year loan payment is $ . (Round to the nearest cont.) b. Prepare a loan amortization schedule showing the interest and principal breakdown of each of the three loan payments. Many financial calculators have an amortization function which makes this process easy. Once the payment is determined in step a above, you can use the AMORT function to calculate the interest paid, principal paid and ending loan balance for each payment period. You should consult your calculator instructions for specifie details pertaining to your calculator What is the account balance at the beginning of your 1? (Round to the nearest cent.) Beginning of year principal Loan payment End-of-year Payments Interest Principal End-of-year principal What is the amount of the loan payment at the end of year 1? (Round to the nearest cont.) Beginning of year principal $46,000 End-of-year Payments interest Principal Loan payment SL End-of-year principal What portion of the payment is applied to interest in your 12 (Round to the nearest cont.) Click to select your answers).

Loan amortization schedule Personal Finance Problem amortized into three equal, annual end-of-year payments Joan Mossino borrowed $46,000 ata 4% annual rate of interest to be repaid over 3 years. The loan is a. Calculate the annual and of year loan payment b. Prepare a loan amortization schedule showing the interest and principal breakdown of each of the three loan payments. c. Explain why the interest portion of each payment declines with the passage of time What portion of the payment is applied to interest in year 1? (Round to the nearest cont.) Payments - End-ofyear Beginning of year principal 546,000 Loan payment $16,576.03 Interest Principal End-of-year principal What portion of the payment is applied to the principal in year 17 (Round to the nearest cent) End of year Beginning of year principal $46,000 Loan payment $16,576.03 Payments interest Principal $1,340.00 S End-of-year principal What is the principal balance at the end of year 17 (Round to the nearest cent) fodules Beginning of year principal $46,000 Tools End-of-year > Loan payment $16.575.03 End-ofyear principal Payments Interest Principal 51.840.00 $14.736.03 Click to select your answers).

Loan amortization schedule Personal Finance Problem Joan Messico borrowed $46,000 of 4% annual rate of interest to be repaid over 3 years. The loan is amortized into three equal, annual end-of-year payments a. Calculate the annual end-of-year loan payment b. Prepare a loan amortization schedule showing the interest and principal breakdown of each of the tree loan payments c. Explain why the interest portion of each payment declines with the passage of time TUS What is the account balance at the beginning of year 27 (Round to the nearest cent) End-of-year Beginning of year principal $46,000 Loan payment $16,576.63 Payments Interest Principal $1,840.00 $14,736.03 End-of-year principal $31,263.97 ibrary What is the amount of the loan payment at the end of year 2? (Round to the nearest cont.) ulator - End-of-year Beginning of year principal S05.000 $31.263.07 urces Payments interest Principal $1,840.00 $14.736 03 Loan payment $16.576 03 SC End-of-year principal 31.263.97 ty Modules What portion of the payment is applied to interest in year 27 Round to the nearest cent) on Tools Beginning of year End-of-year rincial Click to select your answers Loan ament Payments interest Principal End of year rinciaal

Joan Mossino borrowed $40,000 at 4% annual rate of interest to be paid over 3 years. The loan is Loan amortization schedule Personal Finance Problem amortured into three que annual end of your payments a. Calculate the annual, and of year loan payment b. Prepare a loan amortization schedule showing the interest and principal breakdown of each of the three loan payments c. Explain why the interest portion of each payment declines with the passage of time Beginning Payments of year Loan End-of-year End-of-year principal payment interest Principal principal $46,000 $16,576.03 $1.840.00 $14,736-03 $31,263.97 $31,263.97 $16.578.03 SI What portion of the payment is applied to the principal in year 2? (Round to the nearest cont.) brary End-of-year Beginning of year principal $46,000 $31.203.07 Payments interest Principal $1,340.00 $14,736 03 $1,250.56 Loan payment $16,576 03 $16,57603 End-of-year principal $31.263.97 water What is the principal balance at the end of year 27 (Round to the newest cont) ty Modules Payments End-of-year on Tools Beginning of year principal $46,000 $31.263.97 Loan payment $16.576 03 $16.576 03 interest $1,840.00 $1,250 56 End-of-year principal $31.263.97 Principal Principal $14,73603 $15,325 47 Click to select your answers).

Loan amortization schedule Personal Finance Problem Joan Messineo borrowed $46,000 at a 4% annual rate of interest to be repaid over 3 years. The loan is amortized into three equal, annual, ond-of-year payments. a. Calculate the annual, end-of-year loan payment b. Prepare a loan amortization schedule showing the interest and principal breakdown of each of the three loan payments. c. Explain why the interest portion of each payment declines with the passage of time. What is the account balance at the beginning of year 3? (Round to the nearest cont.) End-of-year Beginning of-year principal $46,000 $31,263.97 S Loan payment $16,576.03 $16,576.03 Payments Interest Principal $1,840.00 $14.736,03 $1,250.56 $15,325.47 End-of-year principal $31,263.97 What is the amount of the loan payment at the end of year 3? (Round to the nearest cent) Payments End-of-year Beginning of-year principal $46,000 $31,263.97 $15,038.50 Loan payment $16,576.03 $16,576.03 $ Interest $1,840.00 $1,250.56 Principal $14.738.03 $15,325 47 - End-of-year principal $31,263.97 $15,938.50 What portion of the payment is applied to interest in year 3? (Round to the nearest cent.) Beginning Pavments Click to select your answer(s).

Loan amortization schedule Personal Finance Problem amortized into three equal, annual, and of year payments Joan Mossino borrowed $45.000 a 4% annual rate of interest to be read over 3 years. The loan is a. Calculate the annual, end-of-year loan payment. b. Prepare a loan amortization schedule showing the interest and principal breakdown of each of the three loan payments c. Explain why the interest portion of each payment declines with the passage of time 3 $15.938.50 $ actid What portion of the payment is applied to interest in year 3? (Round to the nearest cont.) $45 Beginning of-y Payments of year Loan End-of year shos End-of-year principal payment Interest Principal principal $46,000 $16,576.03 $1,840.00 $14,736.03 $31,263.97 : See $31,263.97 $16,576.03 $20 56 515 325 47 $15.938.50 $15.938.50 $16,576.03 Loat bort What portion of the payment is applied to the principal in year 3? (Round to the nearest cont.) Calc prin Beginning Payments of year Loan End of year End-of-year principal payment Interest Principal principal See $46,000 $16,576.03 $1,840.00 $14,736.03 $31,263.97 $31,263.97 $16,576.03 $1,250.56 $15,325,47 $15,938.50 $15,938.50 $16,526.03 $63754 What is the principal balance at the end of year 3? (Round to the nearest cent.) nex Cick to select your answers).

Loan amortization schedule Personal Finance Problem amortired into three equal, annual end-of-year payments. Joan Messico borrowed $46,000 at 4% annual rate of interest to be paid over 3 years. The loan is a. Calculate the annual, end-of-year loan payment. b. Prepare a loan amortization schedule showing the interest and principal breakdown of each of the three loan payments. c. Explain why the interest portion of each payment declines with the passage of lime $46,000 $16,576.03 $1,840.00 $14,736.03 $31,263.97 $31,263.97 $16,576.03 $1,250.56 $15,325.47 $15,938.50 $15,938.50 $16,576.03 $637 54 of-y hol What is the principal balance at the end of year 3? (Round to the nearest cent) Gee End-of-year Beginning- of-year principal $46,000 $31,263.97 $15,938.50 Loan payment $16,576.03 $16,576.03 $16,576.03 Payments Interest Principal $1,840,00 $14.738.03 $1,250.56 $15,325.47 563754 $15.938.49 End-of-year principal $31.263.97 $15,938.50 oat sort Cale rin c. Explain why the interest portion of each payment declines with the passage of time. (Select the best answer below) O O O O A Through annual end of the year payments, the interest balance of the loan is declining, causing less principal to be accrued on the balance B. Through annual end of the year payments, the principal balance of the loan is declining, causing less interest to be accrued on the balance C. Through annual end-of-the-year paymhts, the principal balance of the loan is declining, causing more interest to be accrued on the balance D. Through annual end of the year payments, the principal balance of the loan is increasing, causing less interest to be accrued on the balance Click to select your answers) bt

## Answers

a]Monthly loan payment is calculated using PMT function in Excel :

rate = 4% (annual rate of interest)

nper = 3 (3 year loan with 1 payment each year)

pv = 46000 (loan amount)

PMT is calculated to be $16,576.03

b]Interest in each year = principal outstanding at beginning of year

*4%Principal portion of yearly payment = yearhly payment

minusinterest portion of paymentprincipal outstanding at end of year = principal outstanding at beginning of year

minusprincipal portion of yearly payment

c]B is the correct option

As the principal balance is decreasing, the interest charged is also decreasing

: x x f А1 A A | ($16,576.03)! =PMT(4%,3,46000) D E B CI I . B C D E F G H Principal outstanding at 1 Year beginning Payment 1 $ 46,000.00 $ 16,576.03 2 $ 31,263.97 $ 16,576.03 4 3 $ 15,938.49 $ 16,576.03 Principal outstanding Principal $ 14,736.03 $ 31,263.97 $ 15,325.47 $ 15,938.49 $ 15,938.49 $ Interest $ 1,840.00 $1,250.56 $ 637.54 $16,576.03A B C D E F G H Principal outstanding at 1 Year beginning 2 1 46000 32 =F2 4 3 =F3 Principal outstanding at end =B2-E2 =B3-E3 =B4-E4 Payment Interest Principal =$H$2 =B2*4% =C2-D2 =$H$2 =B3*4% =C3-D3 =$H$2 =B4*4% =C4-D4 =PMT(4%,3,-46000)

#### Similar Solved Questions

1 answers

##### Multiple Choice Question When prepaid accounts increase, it indicates the company has paid recorded as operating...

Multiple Choice Question When prepaid accounts increase, it indicates the company has paid recorded as operating expenses. cash than it more less Rate your confidence to submit your answer....

1 answers

##### 10. The solubility of which of the following is not affected by solution pH? a. CaCO3...

10. The solubility of which of the following is not affected by solution pH? a. CaCO3 b. NaCl c. Fe(OH)2 d. Mg(NO2)2...

1 answers

##### QUESTION 35 Uma was simply enjoying a birthday party with friends when she experienced a feeling...

QUESTION 35 Uma was simply enjoying a birthday party with friends when she experienced a feeling of reward that was unexpectedly frightening Uma became high on something that was unknown to her. Select the part of the brain where this brain reward feeling start A Ventral Tegmental Area (VTA) OB. Tha...

1 answers

##### The bottom part of the figure below shows a wire loop connected to a battery and...

The bottom part of the figure below shows a wire loop connected to a battery and switch. Another wire loop is placed above the lower loop. What happens immediately after the switch is closed? Hlit Select one: a. The lower loop exerts a torque on the upper loop. b. The lower loop exerts an upward for...

1 answers

##### Junk Bonds

Junk bonds are high risk, high yield debt instruments. They are often used to finance leveraged buyouts and mergers, and to provide financing to companies ofquestionable financial strength. True or False...

1 answers

##### 4. (True or False) Many of the comparison procedures and tests we discussed such as the...

4. (True or False) Many of the comparison procedures and tests we discussed such as the t-test for difference in two means, test for two proportions and the F test for the equality of two variances only control for the pairwise (or individual) comparison error rate. One reason things get more compli...

1 answers

##### Ssignment: Chpater 11 0 X Assignment Score: 27.27% Save muestions Problem 11-12 (Calculation of g L...

ssignment: Chpater 11 0 X Assignment Score: 27.27% Save muestions Problem 11-12 (Calculation of g L and EPS) Submit Assignment for Grading Question 8 of 11 Check My Work eBook Calculation of g and EPS Spencer Supplies' stock is currently selling for $60 a share. The firm is expected to earn $5.4...

1 answers

##### Figure shows a capacitor connected to a voltage source. There are two dielectric bricks in the...

Figure shows a capacitor connected to a voltage source. There are two dielectric bricks in the capacitor. d = 0.2mm V = 5cos (10°t)v &rl = 5 &r2 = 8 I= 5mm w = 2mm W, = 3mm Problem [5] <10 points> Calculate the magnitude of the total current on the capacitor. Problem [6] <10 poi...

1 answers

##### If a stone is thrown vertically upward from the surface of the moon with a velocity...

If a stone is thrown vertically upward from the surface of the moon with a velocity of 6 m/s, its height (in meters) after t seconds is h = 6t - 0.83t2. (Round the answers to two decimal places.) a. What is the velocity of the stone after 3 s? b. What is the velocity of the stone after it has risen ...

1 answers

##### Maple Corp. had net sales of $204,550 for the year ended December 31, 2017. Its beginning...

Maple Corp. had net sales of $204,550 for the year ended December 31, 2017. Its beginning and ending total assets were $83,200 and $116,500, respectively. Determine Maple's asset turnover ratio for the year ended December 31, 2017. (Round your answer to two decimal places.) O A. 2.46 times B. 2....

1 answers

##### Case 2-9 Racially Charged Language Inhibits Inclusive Cultures Leaving home for the first time and going...

Case 2-9 Racially Charged Language Inhibits Inclusive Cultures Leaving home for the first time and going off to college is an exciting and stressful time for tens of thousands of students across the U.S. each year. Leaving the familiarity of family, friends, and community behind and entering an ofte...

1 answers

##### Question: Blair & Rosen, Inc. (B&R) is a brokerage firm that specializes in investment po...

Question: Blair & Rosen, Inc. (B&R) is a brokerage firm that specializes in investment portfolios d... Blair & Rosen, Inc. (B&R) is a brokerage firm that specializes in investment portfolios designed to meet the specific risk tolerances of its clients. A client who contacted B&R ...

1 answers

##### Betty's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs...

Betty's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $175.000 are allocated on the basis of budgeted warehouse- hours. Data Center Department costs of $75.000 are allocated based on the number of computer log-on hours. The costs of op...

1 answers

##### A 1.55 H inductor carries a steady current of 0.480 A. When the switch in the...

A 1.55 H inductor carries a steady current of 0.480 A. When the switch in the circuit is thrown open, the current is effectively zero in 10.0 ms. What is the average induced emf in the inductor during this time? Additional Materials...

1 answers

##### Through Geogebra (or any other geometry application): Beginning with two points A and B such that...

Through Geogebra (or any other geometry application): Beginning with two points A and B such that the length of AB = 1, construct a segment of length 4√5 using AB and geometry....