assume that you will have a 10-year, $11,000 loan to repay when you graduate fro
ID: 2422410 • Letter: A
Question
assume that you will have a 10-year, $11,000 loan to repay when you graduate from college next month. The loan, plus 7 percent annual interest on the unpaid balance, is to be repaid in 10 annual installments of $1,566 each, beginning one year after you graduate. You have accepted a wellpaying job and are considering an early settlement of the entire unpaid balance in just three years (immediately after making the third annual payment of $1,566).
Prepare an amortization schedule showing how much money you will need to save to pay the entire unpaid balance of your loan three years after your graduation. (Round your answers to the nearest dollar amount. Enter all amounts as positive numbers.)
assume that you will have a 10-year, $11,000 loan to repay when you graduate from college next month. The loan, plus 7 percent annual interest on the unpaid balance, is to be repaid in 10 annual installments of $1,566 each, beginning one year after you graduate. You have accepted a wellpaying job and are considering an early settlement of the entire unpaid balance in just three years (immediately after making the third annual payment of $1,566).
Explanation / Answer
interest period annual payment annual interest expense @7% reduction in unpaid balance unpaid balance date of graduation 11000 year 1 1566 770 796 10204 year 2 1566 714.28 851.72 9352.28 year 3 1566 654.6596 911.3404 8440.94 at the end of 3rd year you will need 8440.94 to repay the loan
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