Question

Prepare an amortization schedule for a three-year loan of $60,000. The interest rate is 9 percent per year, and the loan calls for equal annual payments. How much total interest is paid over the life of the loan

Answer 1

Using the excel formula to calculate the yearly payment we calculate the amount which is 23,703.29 . Base in this information we proceed to prepare the amortization schedule:

Period Initial amount Amortización Interest Payment Final Amount

1 60,000.00 18,303.29 5,400.00 23,703.29 41,696.71

2 41,696.71 19,950.58 3,752.70 23,703.29 21,746.13

3 21,746.13 21,746.13 1,957.15 23,703.29 -

The total interest paid is $ 11,109.86