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The following table shows a portion of a three-year amortization schedule.
3 year amortization schedule loan amount or principal $12,240.00 Interest Rate or loan 8.71% Extra payment to principal amount.
Month 13 has a payment of $387.58 with a principal of 325.82 and an interest of 61.76 and a balance of $8,182.71
Month 14 has a payment of $387.58 with a principal of 328.19 and an interest of 59.39 and a balance of $7,854.52
Month 15 has a payment of $387.58 with a principal of 330.57 and an interest of 57.01 and a balance of $7,523.95
Month 16 has a payment of $387.58 with a principal of 332.97 and an interest rate of 54.61 and a balance of $7,190.99
Month 17 has a payment of $387.58 with a principal of 335.38 and an interest rate of 52.19 and a balance of $6,517.78
Month 18 has a payment of $387.58 with a principal of 337.82 and an interest rate of 49.76 and a balance of $6,517.78
Month 19 has a payment of $387.58 with a principal of 340.27 and an interest rate of 47.31 and a balance of $6,177.51
Use the information in the table to decide which of the following statements is true.
A) The payment amount changes each month.
B) The amount applied to the principal is decreasing each month.
C) The amount applied to the principal is increasing each month.
D) The amount applied to interest is increasing each month.
Please walk me through this, very lost.

Sagot :

Answer:

C) The amount applied to the principal is increasing each month.

Step-by-step explanation:

I took the test

anthougo

The true statement about the three-year amortization schedule is C) The amount applied to the principal is increasing each month.

What is an amortization schedule?

An amortization schedule is a table that shows the periodic payments, portions of interest and principal paid, and the loan balance.  It is useful for financial managers to understand how much is remaining unpaid and the amount to record as the interest expense periodically.

Data and Calculations:

Principal = $12,240

Interest rate = 8.71%

Period        Payment   Interest   Repayment    Extra Payment    Balance

Month 13    $387.58     $61.76      $325.82          $0                   $8,182.71

Month 14    $387.58   $59.39       $328.19           $0                 $7,854.52

Month 15    $387.58    $57.01      $330.57           $0                 $7,523.95

Month 16    $387.58    $54.61      $332.97           $0                 $7,190.99

Month 17     $387.58   $52.19      $335.38           $0                $6,855.60

Month 18    $387.58   $49.76      $337.82           $0                 $6,517.78

Month 19    $387.58   $47.31      $340.27            $0                 $6,177.51

Annual Percentage Rate = 8.71% ($49.76/$6,517.78 x 100 x 12)

Monthly Percentage (Interest) Rate = 0.726%.

Thus, the true statement about the three-year amortization schedule is Option C).

Learn more about amortization schedules at https://brainly.com/question/24576997

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