Problem 5-55 Amortization with Equal Payments [LO 3] Prepare an amortization sch

Question

Problem 5-55 Amortization with Equal Payments [LO 3]

Prepare an amortization schedule for a three-year loan of $99,000. The interest rate is 10 percent per year, and the loan calls for equal annual payments. How much total interest is paid over the life of the loan?(Enter rounded answers as directed, but do not use rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16). Leave no cells blank. You must enter '0' for the answer to grade correctly.)

Year

Beginning
Balance

Total
Payment

Interest
Payment

Principal
Payment

Ending
Balance

1

$

$

$

$

$

2

3

Prepare an amortization schedule for a three-year loan of $99,000. The interest rate is 10 percent per year, and the loan calls for equal annual payments. How much total interest is paid over the life of the loan?(Enter rounded answers as directed, but do not use rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16). Leave no cells blank. You must enter '0' for the answer to grade correctly.)

Explanation / Answer

totalinterest = 20428.11

let x be the equla annual payments

x * [1-(1+0.1)^-3]/0.1 = 99000

x= 39809.37

Beginning Balance.......... Total Payment Interest Principal Ending Balance 1 $99000 ........................... 39809.37 $9900 $29909.37 $69090.63 2 $69090.63.................... 39809.37 $6909.06 $32900.31 $36190.32 3 $36190.32....................... 39809.37 $3619.05 $36190.32 $0

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