Question

Prepare an amortization schedule for a five-year loan of $67,500 _________.

A) with a fixed interest rate
B) with variable interest rates
C) for a 30-year term
D) with a balloon payment

Answer 1

To prepare an amortization schedule for a five-year loan of $67,500 with a fixed interest rate, calculate the monthly payment using the formula Monthly Payment = Loan Amount / Number of Payments and use it to calculate the remaining balance and interest for each payment period.

Step-by-step explanation:

To prepare an amortization schedule for a five-year loan of $67,500 with a fixed interest rate, you will need to determine the monthly payments and the breakdown of principal and interest for each payment. The formula for calculating the monthly payment on a fixed-rate loan is:

Monthly Payment = Loan Amount / Number of Payments

Since the loan is for five years, there will be 60 monthly payments. You can plug in the values into the formula to calculate the monthly payment. To create the amortization schedule, you will use the monthly payment to calculate the remaining balance and interest for each payment period.