Prepare an amortization schedule for a five-year loan of $71,500. The interest rate is 7 percent per year, and the loan calls for equal annual payments. (Do not round ntermediate calculations and round your answers to 2 decimal places, e.g. 32.16 Leave no cells blank-be certain to enter "O" wherever required.) 35 Beginning Balance Total Payment How much interest is paid in the third year? (Do not round intermediate calculations and round your answer to 2 decimal places, e-g.32.16) 70#81-Ell] < Prey Next > 3 9

Question

contestada

Respuesta :

TomShelby TomShelby · Answer 1 · 2019-11-08T00:25:34+01:00

Answer:

Year Carrying value Interest Amortization year-end outstanding

1 71,500 5,005 12,433.18 59066.82

2 59,066.82 4,134.68 13,303.51 45763.31

3 45,763.31 3,203.43 14,234.75 31528.55

4 31,528.55 2,207.00 15,231. 19 16297.39

5 16,297.37 1, 140.82 16,297.37 0

Interest on the third year: $ 3.203.43

Explanation:

First step will be to calcualte the quota:

[tex]PV \div \frac{1-(1+r)^{-time} }{rate} = C\\[/tex]

PV 71,500

time 5

rate 0.07

[tex]71500 \div \frac{1-(1+0.07)^{-5} }{0.07} = C\\[/tex]

C $ 17,438.185

Now, we can build up the schedule:

The interest are the carrying value times 7% interest rate

The amortization is the quota less interest expense

And the year-end is the beginning less amortization