A loan of $100,000 is to be paid back over 4-years with monthly payments at j12 = 9%

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A loan of $100,000 is to be paid back over 4-years with monthly payments at j₁₂ = 9%. Set up a repayment schedule for the entire 4-year period using the

(a) amortization method

(b) sum of digits method

To emphasize the “penalty” of paying off your loan early under the sum of digits method, graph the

difference between the outstanding balance columns of the sum of digits method and the amortization

method (do not graph the outstanding balances, just the difference – use either a line or column graph).