13)Your company is planning to borrow $3,000,000 on a 3-year, 12%, annual paymen
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Question
13)Your company is planning to borrow $3,000,000 on a 3-year, 12%, annual payment, fully amortized term loan. What fraction of the payment made at the end of the second year will represent repayment of principal? Round your answer to two decimal places.14)
It is now January 1. You plan to make a total of 5 deposits of $300 each, one every 6 months, with the first payment being made today. The bank pays a nominal interest rate of 8% but uses semiannual compounding. You plan to leave the money in the bank for 15 years. How much will be in your account after 15 years? Round your answer to the nearest cent.
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Explanation / Answer
pls change the figure according to your question. Below given is the same question with solution.
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Q: Your company is planning to borrow $1,000,000 on a 5-year, 15 percent, annual payment, fully amortized term loan. What fraction of the payment made at the end of the second year will represent repayment of principal?
soluion:
N = 5, I = 15, PV = 1000000, to solve for PMT = $298,315.55.
Period
Beginning Balance
Payment
Interest expense
Principal Reduction
Ending Balance
1
1,000,000
298,315.55
150,000
148,315.55
851,684.45
2
851,684.45
298,315.55
127,752.67
170,562.88
681,121.57
The fraction that is principal is $170,562.88/$298,315.55 = 57.18%.
Period
Beginning Balance
Payment
Interest expense
Principal Reduction
Ending Balance
1
1,000,000
298,315.55
150,000
148,315.55
851,684.45
2
851,684.45
298,315.55
127,752.67
170,562.88
681,121.57
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