You borrowed $30,000 at a rate of 8% and must repay it in three equal installments at the end of each of the next 3 years. How large would your payments be; how much of the first payment would represent interest, how much would be principal

In order to solve this problem we will perpere the amortization schedule

As follows

Year Amount Interest 3 Equal Total Closing

8% Instalment Payment Amount

1 30000 2400 10000 12400 20,000

2 20,000 1600 10000 11600 10,000

3 10,000 800 10000 10800 -