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Unformatted text preview: sit at the end of each of the next 10 years to accumulate the required amount?
LG6 4–42 Loan payment Determine the equal annual end-of-year payment required each
year, over the life of the loans shown in the following table, to repay them fully
during the stated term of the loan.
Loan Principal Interest rate A $12,000 B 60,000 12 10 C 75,000 10 30 D 4,000 15 5 8% Term of loan (years)
3 LG6 4–43 Loan amortization schedule Joan Messineo borrowed $15,000 at a 14%
annual rate of interest to be repaid over 3 years. The loan is amortized into three
equal annual end-of-year payments.
a. Calculate the annual end-of-year loan payment.
b. Prepare a loan amortization schedule showing the interest and principal
breakdown of each of the three loan payments.
c. Explain why the interest portion of each payment declines with the passage
of time. LG6 4–44 Loan interest deductions Liz Rogers just closed a $10,000 business loan that is
to be repaid in three equal annual end-of-year payments. The inte...
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