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July 6, 2015

Homework Help: Amoritizing Loans

Posted by Norah on Sunday, September 25, 2011 at 1:49pm.

"A woman borrows $6000 at 9% compounded monthly, which is to be amortized over 3 years in equal monthly payments. For tax purposes, she needs to known the amount of interest paid during each year of the loan. Find the interest paid during the first year, the second year, and the third year of the loan. [hint: Find the unpaid balance after 12 payments and after 24 payments]"

Can someone help me on how to solve this? The answers in the back of the book are $466.05 for the first year, $294.93 for the second, and $107.82 for the third. Also I don't understand how finding the unpaid balance helps. Thanks for your help!!

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