Annual interests on the unpaid balance

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Reference no: EM13788169

Assume that you will have a 10-year, $12,000 loan to repay when you graduate from college next month. The loan, plus 5 percent annual interests on the unpaid balance, is to be repaid in 10 annual instalments of $1,554 each, beginning one year after you graduate. You have accepted a well paying job and are considering an early settlement of the entire unpaid balance in just three years (immediately after making the third annual payment of $1,554).

Prepare an amortization schedule showing how much money you will need to save to pay the entire unpaid balance of your loan three years after your graduation.

Reference no: EM13788169

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