Critical Thinking Questions Case 4-1 Bill has a bicycle repair shop in his basement. He would like a larger workshop so he investigates taking out a loan to convert his garage to a workshop. He uses Excel to create an amortization schedule. Bill would like to borrow $50,000 and pay it off in 10 years. What components will he need to identify for a loan amortization schedule created on an Excel worksheet?
A) beginning and ending loan balance
B) year, rate, monthly interest
C) beginning and ending loan balance and the amount of payment that applies to the principal and interest per year
D) interest paid at the beginning and end of the year

Question

Quizplus · Accepted Answer

To create an amortization schedule on an Excel worksheet, Bill will need to identify the beginning and ending loan balance and the amount of payment that applies to the principal and interest per year. This will allow him to track how much money he owes over time and how much of each payment goes towards paying off the principal versus the interest. The other options listed are not all necessary components for an amortization schedule, and some are not necessary at all.

Critical Thinking Questions Case 4-1 Bill Has a Bicycle Repair