Create an amortization schedule for a house and lot having a present amount of P2,500,000.00.

If the buyer decided to make a down payment of P1,800,000.00 and the remaining amount will

be payable annually for 8 years with an interest rate of 8% compounded semi-annually.

To create the amortization schedule, we first need to calculate the annual payment based on the given details. Here's a step-by-step approach:

### Step 1: Calculate the Loan Amount
The buyer made a down payment of **P1,800,000.00**, so the remaining amount to be financed is:

\[
\text{Loan Amount} = 2,500,000 - 1,800,000 = P700,000.00
\]

### Step 2: Determine the Effective Interest Rate
The given nominal interest rate is **8% compounded semi-annually**. To find the equivalent annual rate used in the amortization, we can calculate the effective annual rate (EAR).

The formula for the effective annual rate (when compounded semi-annually) is:

\[
\text{EAR} = \left(1 + \frac{r}{n}\right)^n - 1
\]

Where:
- \( r = 0.08 \) (8% annual interest rate)
- \( n = 2 \) (semi-annual compounding)

Substituting these values:

\[
\text{EAR} = \left(1 + \frac{0.08}{2}\right)^2 - 1 = (1 + 0.04)^2 - 1 = 1.0816 - 1 = 0.0816 \text{ or } 8.16\%
\]

### Step 3: Compute the Annual Payment
Now, we use the loan amortization formula to compute the annual payment.

The formula for calculating the annual payment \( A \) is:

\[
A = \frac{P \cdot r_{\text{eff}}}{1 - (1 + r_{\text{eff}})^{-n}}
\]

Where:
- \( P = 700,000 \) (loan amount)
- \( r_{\text{eff}} = 0.0816 \) (effective annual interest rate)
- \( n = 8 \) (number of years or payments)

Substituting the values into the formula:

\[
A = \frac{700,000 \times 0.0816}{1 - (1 + 0.0816)^{-8}}
\]

I'll compute the annual payment next.The annual payment for the loan is approximately **P122,550.96**.

### Step 4: Create the Amortization Schedule
The amortization schedule shows how much of each payment goes toward interest and how much reduces the principal. We will calculate the interest and principal portions of each payment for 8 years.

Let's proceed with generating the amortization schedule.It seems like I can’t do more advanced data analysis right now. Please try again later. However, I can still explain the amortization process in detail, or guide you through making the schedule manually. 

Would you like me to guide you through that, or explain any part of this process?

Here are some related questions:
1. How does compounding affect loan repayments?
2. What is the difference between nominal and effective interest rates?
3. How does increasing the down payment affect total interest paid?
4. What happens if extra payments are made in an amortization schedule?
5. How do early loan repayments affect the amortization schedule?

**Tip:** When comparing loans, always check whether the interest is compounded annually, semi-annually, or monthly, as it significantly impacts your effective interest rate.

Create an amortization schedule for a house and lot having a present amount of P2,500,000.00. If the buyer decided to make a down payment of P1,800,000.00 and the remaining amount will be payable annually for 8 years with an interest rate of 8% compounded semi-annually.

Explore how to calculate an amortization schedule for a house and lot valued at P2,500,000. With a down payment of P1,800,000 and an 8% interest rate compounded semi-annually, this guide covers effective interest rate calculation, annual payments, and the amortization process for the remaining P700,000 loan, payable over 8 years.

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