Prepare an amortization schedule for a three-year loan of $96,000. The interest
ID: 2617542 • Letter: P
Question
Prepare an amortization schedule for a three-year loan of $96,000. The interest rate is 9 percent per year, and the loan agreement calls for a principal reduction of $32,000 every year. How much total interest is paid over the life of the loan? (Enter rounded answers as directed, but do not use rounded numbers in intermediate calculations. Leave no cells blank. You must enter '0' for the answer to grade correctly.)
Year
Beginning
Balance
Total
Payment
Interest
Payment
Principal
Payment
Ending
Balance
1
$
$
$
$
$
2
3
Prepare an amortization schedule for a three-year loan of $96,000. The interest rate is 9 percent per year, and the loan agreement calls for a principal reduction of $32,000 every year. How much total interest is paid over the life of the loan? (Enter rounded answers as directed, but do not use rounded numbers in intermediate calculations. Leave no cells blank. You must enter '0' for the answer to grade correctly.)
Explanation / Answer
Amortization schedule
total interest is paid over the life of the loan = $8640 year 1 + $5760 year 2 + $2880 year 3
= $17280
Year BeginningBalance Total
Payment Interest
Payment Principal
Payment Ending
Balance 1 96,000. 40640 96000*0.09 = 8640 32,000 64000 2 64000 37760 64000*.09 = 5760 32,000 32000 3 32000 34880 32000*0.09 = 2880 32,000 0