You borrow $15,000 at 10% per year and will pay off the loan in three equal annu
ID: 1095364 • Letter: Y
Question
You borrow $15,000 at 10% per year and will pay off the loan in three equal annual payments with the first occurring at the end of the fourth year after the loan is made. The three equal annual payments will be $8,028.22. Which of the following is true for your first payment at the end of year 4?
Interest = $8,028.22
Principal = $0
Interest = $1,996.50
Principal = $6,031.72
Interest = $1,393.33
Principal = $6,634.89
Interest = $729.84
Principal = $7,298.38
Interest = $1,266.66
Principal = $6,031.72
Interest = $1,815.00
Principal = $5,483.38
Interest = $1,500
Principal = $6,528.22
Interest = $1,650.00
Principal = $4,984.89
Interest = $0.00
Principal = $8,028.22
Interest = $603.17
Principal = $6,031.72
Interest = $8,028.22
Principal = $0
Interest = $1,996.50
Principal = $6,031.72
Interest = $1,393.33
Principal = $6,634.89
Interest = $729.84
Principal = $7,298.38
Interest = $1,266.66
Principal = $6,031.72
Interest = $1,815.00
Principal = $5,483.38
Interest = $1,500
Principal = $6,528.22
Interest = $1,650.00
Principal = $4,984.89
Interest = $0.00
Principal = $8,028.22
Interest = $603.17
Principal = $6,031.72
Explanation / Answer
Amortization Schedule:
Hence, the principal and interest part are $6031.72 and $1996.50
Period Payment Amount Principal Part Interest Part balance Owed 1 8,028.22 6,031.72 1,996.50 13,933.28 2 8,028.22 6,634.89 1,393.33 7,298.39 3 8,028.23 7,298.39 729.84 0