Читать книгу Fundamentals of Financial Instruments - Sunil K. Parameswaran - Страница 118
AMORTIZATION WITH A BALLOON PAYMENT
ОглавлениеJulie Tate has taken a loan of $25,000 from First National Bank. The loan requires her to pay in eight equal annual installments along with a terminal payment of $5,000. This terminal payment that has to be made over and above the scheduled installment in year eight is termed as a balloon payment. The interest rate is 8% per annum on the outstanding principal. The annual installment may be calculated as follows.
Obviously the larger the balloon, the smaller will be the periodic installment payment for a given loan amount. The amortization schedule may be depicted as shown in Table 2.7.
TABLE 2.7 Amortization with a Balloon Payment
| Year | Payment | Interest | Principal Repayment | Outstanding Principal |
|---|---|---|---|---|
| 0 | 25,000 | |||
| 1 | 3,880.2950 | 2,000.00 | 1,880.30 | 23,119.70 |
| 2 | 3,880.2950 | 1,849.58 | 2,030.72 | 21,088.99 |
| 3 | 3,880.2950 | 1,687.12 | 2,193.18 | 18,895.81 |
| 4 | 3,880.2950 | 1,511.66 | 2,368.63 | 16,527.18 |
| 5 | 3,880.2950 | 1,322.17 | 2,558.12 | 13,969.06 |
| 6 | 3,880.2950 | 1,117.52 | 2,762.77 | 11,206.29 |
| 7 | 3,880.2950 | 896.50 | 2,983.79 | 8,222.50 |
| 8 | 8,880.2950 | 657.80 | 8,222.50 | 0.00 |
