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Prepare an amortization schedule for a three-year loan of $66,000. The interest rate is 11 percent per year, and the loan calls for equal annual payments. How much total interest is paid over the life
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Prepare an amortization schedule for a three-year loan of $66,000. The interest rate is 11 percent per year, and the loan calls for equal annual payments. How much total interest is paid over the life of the loan?

User Luck
by
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1 Answer

5 votes

Answer:

Interest = 15,024.18 Amortization Payment = 27008.06 per year

Step-by-step explanation:

A = P * [ r(1+r)^n / ((1+r)^n - 1) ]

P = 66000

r = 11% = 0.11

n = 3

A = 66000 * [ 0.11(1.11)^3 / (1.11^3 - 1) ]

A = 27008.06

Total Payment = A * n = 27008.06 * 3

Total Payment = 81,024.18

Interest = Total Payment - P = 81024.18 - 66000

Interest = 15024.18

User Madav
by
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