- 20 Marks
QT – May 2016 – L1 – Q7 – Mathematics of Business Finance
Construct an amortization schedule for a loan of GH¢3,000 over 12 years with an annual interest rate of 2%.
Question
A loan of GH¢3,000 at an effective annual interest rate of i = 12% is amortized by means of 12 annual payments, beginning a year after the loan is taken.
Hint: The schedule should have the following columns: Payment, Interest Due, Principal Repaid, and Outstanding Balance.
Required:
Construct an amortization schedule.
Find Related Questions by Tags, levels, etc.
- Tags: Compound Interest, Effective Interest, Loan amortization, Schedules
- Level: Level 1
- Topic: Mathematics of Business Finance
- Series: MAY 2016
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