Question

Question 3 You contract a loan of 180,000AED on 5 years. The interest rate is 2% compounded annually. Construct an amortization schedule for the loan repayment. (5 Marks)

Answer 1

Date	Interest	Principal	Balance
Jan, 2014	$300	$2,855	$177,145
Feb, 2014	$295	$2,860	$174,285
Mar, 2014	$290	$2,865	$171,421
Apr, 2014	$286	$2,869	$168,551
May, 2014	$281	$2,874	$165,677
Jun, 2014	$276	$2,879	$162,798
Jul, 2014	$271	$2,884	$159,915
Aug, 2014	$267	$2,888	$157,026
Sep, 2014	$262	$2,893	$154,133
Oct, 2014	$257	$2,898	$151,235
Nov, 2014	$252	$2,903	$148,332
Dec, 2014	$247	$2,908	$145,424
2014	$3,284	$34,576	$145,424
Jan, 2015	$242	$2,913	$142,512
Feb, 2015	$238	$2,917	$139,594
Mar, 2015	$233	$2,922	$136,672
Apr, 2015	$228	$2,927	$133,745
May, 2015	$223	$2,932	$130,812
Jun, 2015	$218	$2,937	$127,876
Jul, 2015	$213	$2,942	$124,934
Aug, 2015	$208	$2,947	$121,987
Sep, 2015	$203	$2,952	$119,035
Oct, 2015	$198	$2,957	$116,079
Nov, 2015	$193	$2,962	$113,117
Dec, 2015	$189	$2,966	$110,151
2015	$2,586	$35,274	$110,151
Jan, 2016	$184	$2,971	$107,179
Feb, 2016	$179	$2,976	$104,203
Mar, 2016	$174	$2,981	$101,221
Apr, 2016	$169	$2,986	$98,235
May, 2016	$164	$2,991	$95,244
Jun, 2016	$159	$2,996	$92,248
Jul, 2016	$154	$3,001	$89,246
Aug, 2016	$149	$3,006	$86,240
Sep, 2016	$144	$3,011	$83,229
Oct, 2016	$139	$3,016	$80,213
Nov, 2016	$134	$3,021	$77,191
Dec, 2016	$129	$3,026	$74,165
2016	$1,874	$35,986	$74,165
Jan, 2017	$124	$3,031	$71,134
Feb, 2017	$119	$3,036	$68,097
Mar, 2017	$113	$3,042	$65,056
Apr, 2017	$108	$3,047	$62,009
May, 2017	$103	$3,052	$58,957
Jun, 2017	$98	$3,057	$55,901
Jul, 2017	$93	$3,062	$52,839
Aug, 2017	$88	$3,067	$49,772
Sep, 2017	$83	$3,072	$46,700
Oct, 2017	$78	$3,077	$43,623
Nov, 2017	$73	$3,082	$40,540
Dec, 2017	$68	$3,087	$37,453
2017	$1,148	$36,712	$37,453
Jan, 2018	$62	$3,093	$34,360
Feb, 2018	$57	$3,098	$31,263
Mar, 2018	$52	$3,103	$28,160
Apr, 2018	$47	$3,108	$25,052
May, 2018	$42	$3,113	$21,938
Jun, 2018	$37	$3,118	$18,820
Jul, 2018	$31	$3,124	$15,696
Aug, 2018	$26	$3,129	$12,568
Sep, 2018	$21	$3,134	$9,434
Oct, 2018	$16	$3,139	$6,294
Nov, 2018	$10	$3,145	$3,150
Dec, 2018	$5	$3,150	$0
2018	$407	$37,453	$0

I assume that the date of loan is 1 jan 2014 and thereafter i calculated for 5 years

To make the amortization schedule we firstly have to convert the interest into monthly basis.