Ch 05 Loan Amortization

Ch 05 Loan Amortization - LOAN AMORTIZATION Basics and...

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Basics and Sensitivity Analysis Inputs Present value $217,832 Interest rate / year 9.27% Number of years 30 Outputs Year 1 2 3 4 5 6 7 8 9 Beg. Principal Balance $217,832 $216,313 $214,652 $212,838 $210,856 $208,690 $206,323 $203,736 $200,910 Payment $21,712 $21,712 $21,712 $21,712 $21,712 $21,712 $21,712 $21,712 $21,712 Interest Component $20,193 $20,052 $19,898 $19,730 $19,546 $19,346 $19,126 $18,886 $18,624 Principal Component $1,519 $1,660 $1,814 $1,982 $2,166 $2,367 $2,586 $2,826 $3,088 Data Table: Sensitivity of the Interest Component to the Interest Rate / Year Input Values for Output Formula: Interest Component Interest rate / year $20,193 $20,052 $19,898 $19,730 $19,546 $19,346 $19,126 $18,886 $18,624 7.00% $15,248 $15,087 $14,914 $14,729 $14,532 $14,320 $14,094 $13,851 $13,592 8.00% $17,427 $17,273 $17,107 $16,927 $16,733 $16,524 $16,298 $16,054 $15,790 Data Table: Sensitivity of the Principal Component to the Interest Rate / Year Input Values for Output Formula: Principal Component Interest rate / year $1,519 $1,660 $1,814 $1,982 $2,166 $2,367 $2,586 $2,826 $3,088 7.00% $2,306 $2,467 $2,640 $2,825 $3,023 $3,234 $3,461 $3,703 $3,962 8.00% $1,923 $2,077 $2,243 $2,422 $2,616 $2,825 $3,051 $3,296 $3,559 L OAN A MORTIZATION 0 5 10 15 20 25 30 $0 $5,000 $10,000 $15,000 $20,000 $25,000 Principal And Interest Payments Over Time Time (Years) Principal And Interest Components 8% Interest Component 7% Interest Component 8% Principal Component 7% Principal Component 0 5 10 15 20 25 30 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 Loan Amortization Payment Interest Component Principal Component Year
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