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MAT 450 Assignment: Amortization Problems

1. Construct the amortization schedule for a \$20000 debt that is to be amortized in 8 equal quarterly payments at an annual rate of 12 % compounded quarterly on the unpaid balance.

First, determine the size of the payments, PMT = _________?

|Payment # |size of payment |interest paid |balance paid |unpaid balance |
| | | j = 0.03 | |\$20000.00 |
|1 | |\$600.00 | | |
|2 | | | | |
|3 | | | | |
|4 | | | | |
|5 | | | | |
|6 | | | | |
|7 | | | | |
|8 | | | |\$0.00 |

How much total interest will be paid over the 8 quarters ?

2. Consider a \$100,000 debt that is to be amortized in 360 equal monthly payments (i.e., 30-year mortgage) at a nominal rate of 6 % compounded monthly on the unpaid balance. First, determine the size of the payments, PMT = _________?

Construct the first few rows of an amortization schedule

|Payment # |size of payment |interest paid

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