FIGURE 81 Basic Design of a Loan Repayment Schedule Use

question 4

Essay

FIGURE 8.1 Basic Design of a Loan Repayment Schedule Use the design shown in Figure 8.1 to construct a complete repayment schedule including the totaling of the Amount Paid, Interest Paid, and Principal Repaid columns for the following loan.
On April 22, Tim borrowed $2900.00 from Keewatin Credit Union at 6.5% per annum calculated on the daily balance. He gave the Credit Union four cheques for $535.00 dated the 15th of each of the next four months starting May 15 and a cheque dated October 15 for the remaining balance to cover payment of interest and repayment of principal.

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Definitions:

Private Saving

The portion of households' disposable incomes that is not spent on consumption but saved for future use.

Closed Economy

An economic system that does not interact with other economies in terms of trade, investment, or capital flow.

Households

Economic units consisting of all individuals who occupy a home, which participate in economic decisions.

Loanable Funds

A term in economics referring to the market where savers supply funds for loans to borrowers, influenced by interest rates.