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Suppose your business borrows $100,000 to purchase a piece of equipment. You will be borrowing the...

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Finance

Suppose your business borrows $100,000 to purchase a piece ofequipment. You will be borrowing the money and repaying it over athree year period with a fixed monthly payment at an annualinterest rate of 6%. Construct a loan amortization table for thisloan.

Answer & Explanation Solved by verified expert
4.1 Ratings (547 Votes)

Monthly rate(M)= yearly rate/12= 0.50% Monthly payment= 3042.19
Month Beginning balance (A) Monthly payment Interest = M*A Principal paid Ending balance
1 100000.00 3042.19 500.00 2542.19 97457.81
2 97457.81 3042.19 487.29 2554.90 94902.90
3 94902.90 3042.19 474.51 2567.68 92335.22
4 92335.22 3042.19 461.68 2580.52 89754.70
5 89754.70 3042.19 448.77 2593.42 87161.28
6 87161.28 3042.19 435.81 2606.39 84554.90
7 84554.90 3042.19 422.77 2619.42 81935.48
8 81935.48 3042.19 409.68 2632.52 79302.96
9 79302.96 3042.19 396.51 2645.68 76657.28
10 76657.28 3042.19 383.29 2658.91 73998.38
11 73998.38 3042.19 369.99 2672.20 71326.17
12 71326.17 3042.19 356.63 2685.56 68640.61
13 68640.61 3042.19 343.20 2698.99 65941.62
14 65941.62 3042.19 329.71 2712.49 63229.13
15 63229.13 3042.19 316.15 2726.05 60503.09
16 60503.09 3042.19 302.52 2739.68 57763.41
17 57763.41 3042.19 288.82 2753.38 55010.03
18 55010.03 3042.19 275.05 2767.14 52242.89
19 52242.89 3042.19 261.21 2780.98 49461.91
20 49461.91 3042.19 247.31 2794.88 46667.02
21 46667.02 3042.19 233.34 2808.86 43858.17
22 43858.17 3042.19 219.29 2822.90 41035.26
23 41035.26 3042.19 205.18 2837.02 38198.24
24 38198.24 3042.19 190.99 2851.20 35347.04
25 35347.04 3042.19 176.74 2865.46 32481.58
26 32481.58 3042.19 162.41 2879.79 29601.80
27 29601.80 3042.19 148.01 2894.18 26707.61
28 26707.61 3042.19 133.54 2908.66 23798.96
29 23798.96 3042.19 118.99 2923.20 20875.76
30 20875.76 3042.19 104.38 2937.81 17937.94
31 17937.94 3042.19 89.69 2952.50 14985.44
32 14985.44 3042.19 74.93 2967.27 12018.17
33 12018.17 3042.19 60.09 2982.10 9036.07
34 9036.07 3042.19 45.18 2997.01 6039.06
35 6039.06 3042.19 30.20 3012.00 3027.06
36 3027.06 3042.19 15.14 3027.06 0.00
Where
Interest paid = Beginning balance * Monthly interest rate
Principal = Monthly payment – interest paid
Ending balance = beginning balance – principal paid
Beginning balance = previous Month ending balance

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Transcribed Image Text

Suppose your business borrows $100,000 to purchase a piece ofequipment. You will be borrowing the money and repaying it over athree year period with a fixed monthly payment at an annualinterest rate of 6%. Construct a loan amortization table for thisloan.

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