MBA NOTES:MBA NOTES

AMORTIZATION SCHEDULE OR TABLE WITH EXAMPLE DEFINATION: A table which provide the information about the repayment of principal amount and the interest amount. Example: Mr. A borrow 20000 from a bank on 10% interest rate for 4 yeard calculate the equal instalment which is payable at the end of each year and also draw the amortization table. Note: step 1: R calculate first step 2: present value fomula of annuity always. PV = 20000  n=4  i=10%  R=? PV A = R X PVIFA i,n 20000= R x  3.170 R= 20000/3.170 R = 6309 AMORTIZATION TABLE No. of years Equal installment Interest rate Principal Amount Balance 0 - - - 20000 1 6309 (20000*10/100)= 2000 (6309-2000)= 4309 (20000-4309)= 15691 2 6309 (15691*10%)= 1569 (6309-1569)= 4740 (15691-4740)= 10951 3 6309 1095 5214 5737 4 6309 574 ...