1. Construct a loan amortization schedule for a15-year, 7.25% loan of $7,000,000. The loan requires equal,end-of-year payments, and interest is compoundedmonthly.
- What is the total amount ofinterest paid over the life of the
loan?
2. Re-construct this amortizationschedule assumingthat
interest is compounded annually.
- What total amount of interest ispaid over the life of the loan?
- What is the difference betweenthose total interest amounts?
3. Assume that in sections 1 and 2 above, there is arequirement to repay the whole remaining loan balance at the end ofthe tenth year, immediately after making the last equalpayment.
What is the loan balance to be paid in section1?
What is the loan balance to be paid in Section2?
What is the difference between theseamounts?
B.- 1. Construct a loan amortizationschedule for a $3,000,000, 3-year loan, made at
6.50% quoted annual rate. Interest is compounded daily, and theloan requires equal end-of-period monthly payments.(use 360-dayyear for computation)
- What is the total amount of interestpaid on this loan?
