Asked by Mary

Mrs. Smith borrowed $20,000 from Last National Bank. She will repay the loan with 5 annual payments and her interest rate is 14%. a) Find the amount of her annual payments. b) What is her loan balance after she has made her 3rd annual payment?

Answers

Answered by drwls
Use the amortization tool at
http://www.bretwhissel.net/cgi-bin/amortize

The annual payment amount is 5825.67

There is also a formula you can use, but it is rather hard to memorize. You find it at
http://www.vertex42.com/ExcelArticles/amortization-calculation.html
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