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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