637 substituting fva5 20000 and fvifa65yrs 5637 into

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: –3. Spreadsheet Use The annual deposit needed to accumulate the future sum also can be calculated as shown on the following Excel spreadsheet. CHAPTER 4 Time Value of Money 161 Loan Amortization loan amortization The determination of the equal periodic loan payments necessary to provide a lender with a specified interest return and to repay the loan principal over a specified period. loan amortization schedule A schedule of equal payments to repay a loan. It shows the allocation of each loan payment to interest and principal. The term loan amortization refers to the computation of equal periodic loan payments. These payments provide a lender with a specified interest return and repay the loan principal over a specified period. The loan amortization process involves finding the future payments, over the term of the loan, whose present value at the loan interest rate equals the amount of initial principal borrowed. Lenders use a loan amortization schedule to determine these payment amounts and the allocation of each payment to interest and p...
View Full Document

This document was uploaded on 03/03/2014 for the course MBA BMMF at Open University Malaysia.

Ask a homework question - tutors are online