Loan Amortization Problem

Created by Pamela Peterson Drake

Consider a loan of $20,000 with an APR of 10%, with payments made semi-annually for three years.  Amortize this loan over the three years by completing the following table:

Period

(6-month period)

Beginning of the year balance

Payment

Interest

Principal in payment

Ending principal

1

 

 

 

 

 

2

 

 

 

 

 

3

 

 

 

 

 

4

 

 

 

 

 

5

 

 

 

 

 

6

 

 

 

 

 

Solution

Prepared by Pamela Peterson Drake