Answer to Question #175870 in Financial Math for King

Question

Instruction: Refer to the previous lesson on amortization. I reattached the instructional material for your easy reference. Construct an amortization schedule.

1. A debt of P80,000 is to be amortized with P25,000 being paid at the end of every six months. The interest rate is 6% compounded semi-annually. Construct an amortization schedule.
2. A debt of P40,000 is to be amortized with P8,000 being paid at the end of each quarter. The interest rate is 16% compounded quarterly. Construct an amortization schedule.

Answer 1

Interest=previous ending balance*(r/n)

Where:

r=rate

n=number of times payable per year

Principal = due payment-interest

Ending balance=previous ending balance-current principal.

Amortization schedule