Mathematics

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 semi-annually by making 6 equal semi-annual payments.

asked by Gibbons
  1. 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

    posted by Reiny

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