Mathematics
posted by Gibbons on .
Construct a schedule for the amortization of:
(a) a debt of $15,000,000 with interest at 12% by 5 equal annual payments.
(b) a debt of $25,000,000 with interest at 12.5% compounded semiannually by making 6 equal semiannual payments.

a)
First we have to find the payment, assume it is made at the end of each year
15000000= pay( 1  1.12^5)/.12
pay = 4161145.98
Paym# interest principal Balance
1 1800000.00 2361145.98 12638854.02
2 1516662.48 2644483.45 9994370.52
3 1199324.46 2961821.52 7032549.01
4 843905.89 3317240.10 3715308.91
5 445837.07 3715308.91 0.00
not bad,
now do b) the same way
your payment equation will be
25000000 = pay( 1  1.0625^6)/.0625