Calculate the total amount of interest dollars you will pay the bank over thelife of the loan. Round to the nearest dollar and assume end-of-monthpayments.Table 6.2 The Loan Amortization Schedule for a $5,000Loan at 10% to Be Repaid in Four YearsYearAmount Owedon the Principalat the Beginningof the Year (1)InterestPortionAnnuityPayment(2)of the Annuity= (1) x 10%= (3)1$5,000.001577.355002(1) Amount Owed (ii) PMT(III) Intereston the Principalat the BeginningPortion of the2nd yearof the Year 234Repayment of thePrincipal Portionof the Annuity =(2) (3) (4)1077.35(iv) Repayment ofthe PrincipalPortion of the 2ndyearOutstanding LoanBalance at Year End, AftertheAnnuity Payment =(1)-(4) = (5)3922.65(v) Outstanding LoanBalance at Year 2 End,after theAnnuity PaymentSelect an answer and submit. For keyboard navigation, use the up/down arrow keys toselect an answer.a2000b6309с1309d 500

Given data in the questionloan amount= $5000.00Time = 4 yearsInterest rate= 10%Annual Payment = $…

Answered: Calculate the total amount of interest…

Business

Finance

Calculate the total amount of interest dollars you will p

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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Question

Calculate the total amount of interest dollars you will pay the bank over the
life of the loan. Round to the nearest dollar and assume end-of-month
payments.
Table 6.2 The Loan Amortization Schedule for a $5,000
Loan at 10% to Be Repaid in Four Years
Year
Amount Owed
on the Principal
at the Beginning
of the Year (1)
Interest
Portion
Annuity
Payment
(2)
of the Annuity
= (1) x 10%
= (3)
1
$5,000.00
1577.35
500
2
(1) Amount Owed (ii) PMT
(III) Interest
on the Principal
at the Beginning
Portion of the
2nd year
of the Year 2
3
4
Repayment of the
Principal Portion
of the Annuity =
(2) (3) (4)
1077.35
(iv) Repayment of
the Principal
Portion of the 2nd
year
Outstanding Loan
Balance at Year End, After
the
Annuity Payment =
(1)-(4) = (5)
3922.65
(v) Outstanding Loan
Balance at Year 2 End,
after the
Annuity Payment
Select an answer and submit. For keyboard navigation, use the up/down arrow keys to
select an answer.
a
2000
b
6309
с
1309
d 500

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