Amortisation Table – Worksheet

VCE Further Maths Unit 3/4 | Recursion & Financial Maths

1. Alana invests $16 000 into an annuity at an interest rate of 4.6% per annum, compounding
quarterly for 2 years. From this annuity, she receives a quarterly payment of $ 2104.88.
The amortisation table for this annuity is shown below.

Payment Payment Interest Principal Balance of

number received earned reduction annuity
0 0 0.00 0.00 16000.00
1 2104.88 184.00 1920.88 14079.12
2 2104.88 161.91 1942.97 12136.15
3 2104.88 139.57 1965.31 ?
4 2104.88 ? 1987.92 8181.92
5 2104.88 94.10 2010.78 6172.14
6 2104.88 70.98 ? 4138.24
7 2104.88 A B C
8 2104.88 23.93 2080.95 0.00

Determine to the nearest cent:

a. The quarterly interest rate
b. The interest earned with payment one is received.
c. How do we find the balance of the loan for payment 3?
d. How do we find the interest from payment 4?
e. How do we find the principal reduction for payment 6?
f. The values of A, B and C.
g. The total return for the annuity? (How much did Alana receive over 8 quarters?)
h. The total amount of interest earned.

2. Sarannie borrows $2000 for an apartment deposit at an interest rate of 9.2% per annum,
compounding monthly. She repays the loan by making six monthly payments of $342.
Complete the amortisation table below, to the nearest cent.

HINT: Find the rate for the compounding period; Check to see if the final payment needs to be adjusted so that it’s fully paid.

Payment
Payment Interest earned Principal reduction Balance of loan
number
0 0 0.00 0.00 2000.00

6
Amortisation Table – Worksheet
VCE Further Maths Unit 3/4 | Recursion & Financial Maths

Answers:

1.

a. 1.15% What is another way to find this? List both options.

b. $184.00
c. Balance = Balance (of previous payment, ie. payment 2) – Principal reduction (ie. for
payment 3)

12136.15 – 1965.31 = 10170.84

d. Interest earned = Interest rate per compounding period 𝑥𝑥 Balance (of previous, ie. pay 3)

(1.15/100) 𝑥𝑥 10170.84 = 116.96

└> (Don’t forget to convert % into a decimal)

e. Payment – Interest earned (ie. for pay 6) = Principal reduction

2104.88 – 70.98 = 2033.90

f. A: $47.59 B: $2057.29 C: $2080.95

g. $16839.04
h. $839.04

2.

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