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Taxtom
Taxtom, Accountant
Category: Finance
Satisfied Customers: 2364
Experience:  25 Years in preparing Personal and Business Tax Retuns
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In order to illustrate the concept of the time value of money,

Resolved Question:

In order to illustrate the concept of the time value of money, let's consider the following scenario.

Mary has decided to borrow $120,000. The terms of the loan are 6% over the next 4 years. She will be making annual payments (not monthly). This is an important distinction.

Construct a loan amortization schedule that shows the 4 payments of Mary’s loan.
Submitted: 5 years ago.
Category: Finance
Expert:  Taxtom replied 5 years ago.

Taxtom :

Here is your chart

Taxtom :










































Principle Rate Interest Bal w/Int Pmt Bal
$120,000.000.06 $7,200.00 $127,200.00 $34,630.98 $92,569.02
$ 92,569.020.06 $5,554.14 $ 98,123.16 $34,630.98 $63,492.18
$ 63,492.180.06 $3,809.53 $ 67,301.71 $34,630.98 $32,670.73
$ 32,670.730.06 $1,960.24 $ 34,630.98 $34,630.98 $ (0.00)
Taxtom :

Thanks Tom

Customer:

how did you come up with the payment of 34,630.98

Taxtom :

I plugged the figures (changed them until they equaled) but there are many calculators on the web also.

Customer:

ok i got it now thanks

Taxtom :

Your welcome please click accept

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