Calculate the current balance on a loan

Reference no: EM132150042

Question: You have been asked to calculate the current balance on a loan that involves 5 equal mortgage payments of $200,000 per year (principal and interest), but the interest rate changed on the loan is variable. in years 1, 2, and 3 the rate is a nominal 6.0% compounded annually and in years 4 and 5 the rate is a nominal 8.0% compounded annually. To verify the accuracy of your current loan balance calculation, develop a loan amortization schedule to demonstrate how the payments are not only sufficient to pay off the accrued interest over time, but also pay off the debt (principal).

Reference no: EM132150042

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