Questions: FIN310 Graded Project: Corporate Finance Payment Number Payment Amount 5% Interest Expense Principal Balance Annual Interest Expense ------------------ 0 500,000.00 - 1 2,684.11 2,083.33 600.78 499,399.22 2 2,684.11 2,080.83 603.28 498,795.94 ..break in the sequence. -

To address the question related to the FIN310 Graded Project: Corporate Finance, we need to analyze the provided table, which appears to be an amortization schedule for a loan. The table includes columns for payment number, payment amount, interest expense, principal, balance, and annual interest expense. Let's break down the information and calculations for the first two payments:

1. Initial Balance: The loan starts with a balance of $500,000.00.

2. Payment 1:

   • Payment Amount: $2,684.11
   • Interest Expense: $2,083.33
     • This is calculated as 5% of the initial balance ($500,000.00 * 5% / 12 months = $2,083.33).
   • Principal: $600.78
     • This is the portion of the payment that goes towards reducing the principal balance. It is calculated as the payment amount minus the interest expense ($2,684.11 - $2,083.33 = $600.78).
   • New Balance: $499,399.22
     • This is the remaining balance after the principal payment is subtracted from the initial balance ($500,000.00 - $600.78 = $499,399.22).

3. Payment 2:

   • Payment Amount: $2,684.11
   • Interest Expense: $2,080.83
     • This is calculated as 5% of the new balance after the first payment ($499,399.22 * 5% / 12 months = $2,080.83).
   • Principal: $603.28
     • This is the portion of the payment that goes towards reducing the principal balance. It is calculated as the payment amount minus the interest expense ($2,684.11 - $2,080.83 = $603.28).
   • New Balance: $498,795.94
     • This is the remaining balance after the principal payment is subtracted from the previous balance ($499,399.22 - $603.28 = $498,795.94).

The table is incomplete, and there is a break in the sequence, so we cannot calculate further payments or the annual interest expense without additional information. However, the pattern established in the first two payments can be used to continue the amortization schedule if more data were provided.

In summary, the table outlines the process of amortizing a loan with a fixed payment amount, where each payment covers both interest and principal, gradually reducing the loan balance over time.