Problem
Larkspur Inc. developed a new sales gimmick to help sell its inventory of new automobiles. Because many new car buyers need financing, Larkspur offered a low downpayment and low car payments for the first year after purchase. It believes that this promotion will bring in some new buyers.
On January 1, 2017, a customer purchased a new $36,600 automobile, making a downpayment of $1,320. The customer signed a note indicating that the annual rate of interest would be 8% and that quarterly payments would be made over 3 years. For the first year, Larkspur required a $441 quarterly payment to be made on April 1, July 1, October 1, and January 1, 2018. After this one-year period, the customer was required to make regular quarterly payments that would pay off the loan as of January 1, 2020.
Prepare a note amortization schedule for these new payments for the next 2 years.