Tony’s favorite memories of his childhood were the times he spent with his dad a
ID: 2581314 • Letter: T
Question
Tony’s favorite memories of his childhood were the times he spent with his dad at camp. Tony was daydreaming of those days a bit as he and Suzie jogged along a nature trail and came across a wonderful piece of property for sale. He turned to Suzie and said, “I’ve always wanted to start a camp where families could get away and spend some quality time together. If we just had the money, I know this would be the perfect place.” They called several banks and on January 1, 2020, Great Adventures obtained a $570,000, 6%, 9-year installment loan from Summit Bank. Payments of $6,843 are required at the end of each month over the life of the 9-year loan. Each monthly payment of $6,843 includes both interest expense and principal payments (i.e., reduction of the loan amount). Late that night Tony exclaimed, “$570,000 for our new camp, this has to be the best news ever.” Suzie snuggled close and said, “There’s something else I need to tell you, Tony, I’m expecting!” They decided right then, if it was a boy, they would name him Venture. Required: 1. Complete the first three rows of an amortization table.
Explanation / Answer
Amortization Table Sl no Installment financial charge Principle to be reduced Outstanding installment 1 6843 2850.00 3993.00 566007.00 2 6843 2830.04 4012.97 561994.04 3 6843 2809.97 4033.03 557961.01