| PVOA= | $1,733 | ||||||
| PMT=?? | PMT=?? | PMT=?? | PMT=?? | ||||
| ← 1 year → | ← 1 year → | ← 1 year → | ← 1 year → | ||||
| 6/1/08 | 6/1/09 | 6/1/10 | 6/1/11 | 6/1/12 | |||
| 0 | 1 | 2 | 3 | 4 | |||
| PVOA = | PMT times [ PVOA factor = for n = 4 years; i = 6% per year ] | |
| $1,733 = | PMT times [ 3.465 ] ← PVOA Factor for n = 4; i = 6% from PVOA Table | |
| $1,733 / 3.465 = | PMT | |
| $500 = | PMT |
Date Amount Deposited Interest Added* Amount Withdrawn Account Balance June 1, 2008 $ 1,733.00 $ 1,733.00 May 31, 2009 103.98 1,836.98 June 1, 2009 500.00 1,336.98 May 31, 2010 80.22 1,417.20 June 1, 2010 500.00 917.20 May 31, 2011 55.03 972.23 June 1, 2011 500.00 472.23 May 31, 2012 28.33 500.56 June 1, 2012 500.00 0.56
* 6% of previous account balance
| PVOA= | $10,152 | ||||||
| PMT=?? | PMT=?? | PMT=?? | PMT=?? | ||||
| ..... | |||||||
| ← 6 months → | ← 6 months → | ← 6 months → | ← 6 months → | ||||
| 01/01/08 | 6/30/08 | 12/31/08 | 6/30/09 | 12/31/10 | |||
| 0 | 1 | 2 | 3 | 6 | |||
| PVOA = | PMT times [ PVOA factor = for n = 6 semiannual periods; i = 5% per semiannual period ] | |
| $10,152 = | PMT times [ 5.076 ] ← PVOA Factor for n = 6; i = 5% from PVOA Table | |
| $10,152 / 5.076 = | PMT | |
| $2,000 = | PMT |
Loan Amortization Schedule
(For $10,152.00 at 10% per year with 6 semiannual payments.)
Pmt No. Date Total Payment Interest Payment* Principal Payment** Principle Balance Jan. 1, 2008 $ 10,152.00 1 June 30, 2008 $ 2,000.00 $ 507.60 $ 1,492.40 $ 8,659.60 2 Dec. 31, 2008 2,000.00 432.98 1,567.02 7,092.58 3 June 30, 2009 2,000.00 354.63 1,645.37 5,447.21 4 Dec. 31, 2009 2,000.00 272.36 1,727.64 3,719.57 5 June 30, 2010 2,000.00 185.98 1,814.02 1,905.55 6 Dec. 31, 2010 2,000.00 95.28 1,904.72 0.83
* Interest payment equals 5% of the previous principal balance.
** Principal payment equals $2,000 minus interest payment.
|
![]() Now you can highlight, make notes, and study away
|
» How do I calculate IRR and NPV?
» Why would someone buy a bond at a premium?
» What is the difference between Present Value (PV) and Net Present Value (NPV)?
» Should capital budgeting decisions be based on cash flows or revenues and expenses?
» How do you calculate the actual or real interest rate on a bond investment?
» What is a non-discount method in capital budgeting?
» How do you compute the selling price of a bond?

View All Present Value of an Ordinary Annuity Q&A