Question

Assume a lender offers you a 25,000, 10%, three year loan that is to be fully amortized with three annual payments. The first payment will be due one year from the loan date.

Required:
Construct amortization

Answer 1

he already explained it

Answer 2

A = 10,052.87

Step-by-step explanation:

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

P = 25000

r = 10% = 0.1

n = 3

A = 25000 * [ 0.1(1.1)^n / (1.1^3 - 1) ]

10,052.87 = 25000 * [ 0.1331 / 0.331 ]