Virtual Enterprises, International

Loan Amortization Activity

You are the accounting manager of a VE firm that intends to
submit a loan request to VEC Lending for operating capital.

Details for the prospective loan are as follows:

Amount = $200,000
Annual rate of interest = 4.75%
Repayment period = 5 years.

VEC Lending requires that the loan be repaid in 60 equal

monthly payments; payments are due at the end of the
month.

Task
Provide the following information:
What is the amount of the monthly payments?
What is the interest expense for the first year of the loan?
What is the total interest expense over the life of the loan
(assuming the loan is repaid in five years)?
What is the balance of the loan after 12 months?
 Virtual Enterprises International
Loan Amortization Table

Loan Information Summary

Loan Amount (Principal) $ 80,000.00 Rate (per period) 0.7083%
Annual Interest Rate 4.25% Number of Payments 30
Term of Loan in Years 5 Total of Payments 88,941.87
# of Payments per Year 6 Total Interest 20,775.09
Payment Type End of Year
Monthly Payment ($1,482.36)

Interest for the Total Balance Payment for the Principal Revised Balance
No. Principal Period Outstanding period Reduction Outstanding
1 80,000 566.67 80,566.67 1482.36 915.70 79,084.30
2 79084.30 560.18 79,644.48 1482.36 922.18 78,162.12
3 78162.12 553.65 78,715.77 1482.36 928.72 77,233.40
4 77233.40 547.07 77,780.47 1482.36 935.29 76,298.11
5 76298.11 540.44 76,838.55 1482.36 941.92 75,356.19
6 75356.19 533.77 75,889.96 1482.36 948.59 74,407.60
7 74407.60 527.05 74,934.65 1482.36 955.31 73,452.29
8 73452.29 520.29 73,972.57 1482.36 962.08 72,490.21
9 72490.21 513.47 73,003.68 1482.36 968.89 71,521.32
10 71521.32 506.61 72,027.93 1482.36 975.76 70,545.56
11 70545.56 499.70 71,045.26 1482.36 982.67 69,562.89
12 69562.89 492.74 70,055.63 1482.36 989.63 68,573.27
13 68573.27 485.73 69,058.99 1482.36 996.64 67,576.63
14 67576.63 478.67 68,055.30 1482.36 1003.70 66,572.93
15 66572.93 471.56 67,044.49 1482.36 1010.81 65,562.13
16 65562.13 464.40 66,026.53 1482.36 1017.97 64,544.16
17 64544.16 457.19 65,001.35 1482.36 1025.18 63,518.98
18 63518.98 449.93 63,968.91 1482.36 1032.44 62,486.55
19 62486.55 442.61 62,929.16 1482.36 1039.75 61,446.79
20 61446.79 435.25 61,882.04 1482.36 1047.12 60,399.68
21 60399.68 427.83 60,827.51 1482.36 1054.53 59,345.14
22 59345.14 420.36 59,765.51 1482.36 1062.00 58,283.14
23 58283.14 412.84 58,695.98 1482.36 1069.53 57,213.62
24 57213.62 405.26 57,618.88 1482.36 1077.10 56,136.51
25 56136.51 397.63 56,534.15 1482.36 1084.73 55,051.78
26 55051.78 389.95 55,441.73 1482.36 1092.41 53,959.37
27 53959.37 382.21 54,341.58 1482.36 1100.15 52,859.22
28 52859.22 374.42 53,233.64 1482.36 1107.95 51,751.27
29 51751.27 366.57 52,117.84 1482.36 1115.79 50,635.48
30 50635.48 358.67 50,994.15 1482.36 1123.70 49,511.78
31 49511.78 350.71 49,862.49 1482.36 1131.66 48,380.13
32 48380.13 342.69 48,722.82 1482.36 1139.67 47,240.46
33 47240.46 334.62 47,575.08 1482.36 1147.74 46,092.71
34 46092.71 326.49 46,419.20 1482.36 1155.87 44,936.84
35 44936.84 318.30 45,255.14 1482.36 1164.06 43,772.77
36 43772.77 310.06 44,082.83 1482.36 1172.31 42,600.47
37 42600.47 301.75 42,902.22 1482.36 1180.61 41,419.86
38 41419.86 293.39 41,713.25 1482.36 1188.97 40,230.88
39 40230.88 284.97 40,515.85 1482.36 1197.40 39,033.49
40 39033.49 276.49 39,309.97 1482.36 1205.88 37,827.61
41 37827.61 267.95 38,095.55 1482.36 1214.42 36,613.19
42 36613.19 259.34 36,872.53 1482.36 1223.02 35,390.17
43 35390.17 250.68 35,640.85 1482.36 1231.68 34,158.49
44 34158.49 241.96 34,400.44 1482.36 1240.41 32,918.08
45 32918.08 233.17 33,151.25 1482.36 1249.19 31,668.88
46 31668.88 224.32 31,893.20 1482.36 1258.04 30,410.84
47 30410.84 215.41 30,626.25 1482.36 1266.95 29,143.88
48 29143.88 206.44 29,350.32 1482.36 1275.93 27,867.96
49 27867.96 197.40 28,065.35 1482.36 1284.97 26,582.99
50 26582.99 188.30 26,771.29 1482.36 1294.07 25,288.92
51 25288.92 179.13 25,468.05 1482.36 1303.23 23,985.69
52 23985.69 169.90 24,155.58 1482.36 1312.47 22,673.22
53 22673.22 160.60 22,833.82 1482.36 1321.76 21,351.46
54 21351.46 151.24 21,502.70 1482.36 1331.12 20,020.33
55 20020.33 141.81 20,162.14 1482.36 1340.55 18,679.78
56 18679.78 132.32 18,812.09 1482.36 1350.05 17,329.73
57 17329.73 122.75 17,452.48 1482.36 1359.61 15,970.12
58 15970.12 113.12 16,083.24 1482.36 1369.24 14,600.87
59 14600.87 103.42 14,704.30 1482.36 1378.94 13,221.93
60 13221.93 93.66 13,315.59 1482.36 1388.71 11,833.22
Totals 20,775.09 88,941.87 68,166.78
 Virtual Enterprises International
Loan Amortization Table

Loan Information Summary

Loan Amount (Principal) 200,000 Rate (per period) 0.3958%
Annual Interest Rate 4.75% Number of Payments 60
Term of Loan in Years 5 Total of Payments 225,082.94
# of Payments per Year 12 Total Interest 25,082.94
Payment Type end of period
Monthly Payment ($3,751.38)

Interest for the Total Balance Payment for the Principal Revised Balance
No. Principal Period Outstanding period Reduction Outstanding
1 200,000 791.67 200,791.67 3751.38 2959.72 197,040.28
2 197040.28 779.95 197,820.24 3751.38 2971.43 194,068.85
3 194068.85 768.19 194,837.04 3751.38 2983.19 191,085.66
4 191085.66 756.38 191,842.04 3751.38 2995.00 188,090.66
5 188090.66 744.53 188,835.18 3751.38 3006.86 185,083.80
6 185083.80 732.62 185,816.42 3751.38 3018.76 182,065.04
7 182065.04 720.67 182,785.72 3751.38 3030.71 179,034.33
8 179034.33 708.68 179,743.01 3751.38 3042.70 175,991.63
9 175991.63 696.63 176,688.26 3751.38 3054.75 172,936.88
10 172936.88 684.54 173,621.42 3751.38 3066.84 169,870.04
11 169870.04 672.40 170,542.44 3751.38 3078.98 166,791.06
12 166791.06 660.21 167,451.27 3751.38 3091.17 163,699.89
13 163699.89 647.98 164,347.87 3751.38 3103.40 160,596.49
14 160596.49 635.69 161,232.18 3751.38 3115.69 157,480.80
15 157480.80 623.36 158,104.16 3751.38 3128.02 154,352.78
16 154352.78 610.98 154,963.76 3751.38 3140.40 151,212.38
17 151212.38 598.55 151,810.93 3751.38 3152.83 148,059.54
18 148059.54 586.07 148,645.61 3751.38 3165.31 144,894.23
19 144894.23 573.54 145,467.77 3751.38 3177.84 141,716.39
20 141716.39 560.96 142,277.35 3751.38 3190.42 138,525.97
21 138525.97 548.33 139,074.30 3751.38 3203.05 135,322.91
22 135322.91 535.65 135,858.57 3751.38 3215.73 132,107.19
23 132107.19 522.92 132,630.11 3751.38 3228.46 128,878.73
24 128878.73 510.14 129,388.87 3751.38 3241.24 125,637.49
25 125637.49 497.32 126,134.81 3751.38 3254.07 122,383.42
26 122383.42 484.43 122,867.86 3751.38 3266.95 119,116.47
27 119116.47 471.50 119,587.98 3751.38 3279.88 115,836.60
28 115836.60 458.52 116,295.12 3751.38 3292.86 112,543.73
29 112543.73 445.49 112,989.22 3751.38 3305.90 109,237.84
30 109237.84 432.40 109,670.24 3751.38 3318.98 105,918.85
31 105918.85 419.26 106,338.12 3751.38 3332.12 102,586.73
32 102586.73 406.07 102,992.81 3751.38 3345.31 99,241.42
33 99241.42 392.83 99,634.25 3751.38 3358.55 95,882.87
34 95882.87 379.54 96,262.41 3751.38 3371.85 92,511.03
35 92511.03 366.19 92,877.21 3751.38 3385.19 89,125.83
36 89125.83 352.79 89,478.62 3751.38 3398.59 85,727.24
37 85727.24 339.34 86,066.58 3751.38 3412.05 82,315.19
38 82315.19 325.83 82,641.03 3751.38 3425.55 78,889.64
39 78889.64 312.27 79,201.91 3751.38 3439.11 75,450.53
40 75450.53 298.66 75,749.19 3751.38 3452.72 71,997.81
41 71997.81 284.99 72,282.80 3751.38 3466.39 68,531.42
42 68531.42 271.27 68,802.69 3751.38 3480.11 65,051.30
43 65051.30 257.49 65,308.80 3751.38 3493.89 61,557.42
44 61557.42 243.66 61,801.08 3751.38 3507.72 58,049.70
45 58049.70 229.78 58,279.48 3751.38 3521.60 54,528.10
46 54528.10 215.84 54,743.94 3751.38 3535.54 50,992.56
47 50992.56 201.85 51,194.40 3751.38 3549.54 47,443.02
48 47443.02 187.80 47,630.81 3751.38 3563.59 43,879.43
49 43879.43 173.69 44,053.12 3751.38 3577.69 40,301.74
50 40301.74 159.53 40,461.27 3751.38 3591.85 36,709.88
51 36709.88 145.31 36,855.19 3751.38 3606.07 33,103.81
52 33103.81 131.04 33,234.85 3751.38 3620.35 29,483.46
53 29483.46 116.71 29,600.17 3751.38 3634.68 25,848.79
54 25848.79 102.32 25,951.11 3751.38 3649.06 22,199.72
55 22199.72 87.87 22,287.60 3751.38 3663.51 18,536.21
56 18536.21 73.37 18,609.59 3751.38 3678.01 14,858.20
57 14858.20 58.81 14,917.02 3751.38 3692.57 11,165.64
58 11165.64 44.20 11,209.83 3751.38 3707.19 7,458.45
59 7458.45 29.52 7,487.97 3751.38 3721.86 3,736.59
60 3736.59 14.79 3,751.38 3751.38 3736.59 0.00
Totals 25,082.94 225,082.94 200,000.00