## Repayment Schedule:

When someone takes a loan, the repayment schedule attached to the loan tells the amount that needs to be paid and the interest and principal component covered in the instalment.

The 5-year repayment schedule for the loan is as below:

Year Openin Balance Interest @10% Repyament Closing Balance
1 10,000 1,000 3,000 8,000
2 8,000 800 2,800 6,000
3 6,000 600 2,600 4,000
4 4,000 400 2,400 2,000
5 2,000 200 2,200 -
13,000

The last column of closing balance represents the amount of principal left at the end of each year. Also, the payment made during the 5 year period is \$13,000.