Assume that you will have a 10-year, $10,000 loan to repay to your parents when you graduate from college next month. The loan, plus 7 percent annual interest on the unpaid balance, is to be repaid in 10 annual installments of $1,424 each, beginning one year after you graduate. You have accepted a well-paying job and are considering an early settlement of the entire unpaid balance in just three years (immediately after making the third annual payment of $1,424).
Prepare an amortization schedule showing how much money you will need to save to pay your parents the entire unpaid balance of your loan three years after your graduation.