Question

Suppose that under the Plan of Repayment one should pay off the debt in a number of equal end-of-month installments (principal and interest). This is the customary way to pay of loans on automobiles, house mortgages, etc. A friend of yours has financed $15,000 on the purchase of a new automobile, and the annual interest rate is 12% (1% per month). a. Monthly payments over a 60-month loan period will be how much? D. how much interest and principal will be paid within three month of this loan? Quiz Click the icon to view the interest and annuity table for discrete compounding when i 1% per month. a. The monthly payment over a 60-month loan period is $ (Round to the nearest cent.)

Answer 1

Period Equated Monthly Payment = Loan amount/Present value annuity factor(1%,60 periods) EMI = 15,000/44.95504 EMI = $334 PVIF 1 0.990099 2 0.980296 3 0.9705901 4 0.9609803 5 0.9514657 6 0.9420452 Period EMI WN 191 203 Interest 150 15000*1% 148 148161% 146 14630*1% 144 144421% 143 14252*1% 141 14061*1% 139 13868*1% 137 1367381% 135 13476 1% 133 13277*1% 131 13076*1% 129 128731% 127 12668*1% 125 12461°1% 123 12252*1% 120 12041*1% 118 118271% 116 11611*1% 114 113931% 112 11173*1% 110 1095181% 107 10727*1% 105 10500*1% 103 10271°1% 100 1004081% 98 9806*1% 96 957081% 93 9332*1% 91 9091º1% 88 8848*1% 86 8602*1% 84 835481% 334 334 334 334 334 334 334 334 334 334 334 334 334 334 334 334 334 334 334 334 334 334 334 334 334 334 334 334 334 334 334 334 Reduction in principle Principle 184 14816 186 14630 188 14442 190 14252 14061 193 13868 195 13673 197 13476 199 13277 201 13076 12873 205 12668 207 12461 209 12252 211 12041 11827 216 11611 218 11393 220 11173 222 10951 224 10727 10500 10271 231 10040 234 9806 236 9570 9332 241 9091 243 8848 246 8602 248 8354 250 8104 214 7 0.9327181 8 0.9234832 9 0.9143398 10 0.905287 11 0.8963237 12 0.8874492 13 0.8786626 14 0.869963 15 0.8613495 16 0.8528213 17 0.8443775 18 0.8360173 19 0.8277399 20 0.8195445 21 0.8114302 22 0.8033962 23 0.7954418 24 0.7875661 25 0.7797684 26 0.772048 27 0.7644039 28 0.7568356 29 0.7493421 30 0.7419229 31 0.7345771 32 0.7273041 33 0.7201031 34 0.7129733 35 0.7059142 36 0.6989249 37 0.6920049 38 0.6851534 39 0.6783697 227 229 238

255 မ 258 261 263 266 269 211 334 334 334 334 334 334 334 334 334 334 334 334 334 334 334 334 334 279 282 81 8104*1%% 79 7851*1%% 76 7596*1% 73 7338*1% 71 7077*1% 68 6814*1%% 65 6548*1%% 63 6279*1% 60 6008*1%% 57 5734*1% 55 5457*1% 52 5178*1% 49 48961 46 4611*1%% 43 4323*1%% 40 4032*1%% 37 3738*1% 34 3441*1% 31 3141*1% 28 2838*1% 25 2532*1% 22 2223*1% 19 1911*1%% 16 1596*1% 131278*1%% 10 957*1% 6 633*1%% 3305*1%% 285 7851 7596 7338 7077 6814 6548 6279 6008 5734 5457 5178 4896 4611 4323 4032 3738 3441 3141 2838 2532 2223 1911 1596 1278 957 633 305 0 40 0.6716531 41 0.6650031 42 0.6584189 43 0.6518999 44 0.6454455 45 0.6390549 46 0.6327276 47 0.626463 48 0.6202604 49 0.6141192 50 0.6080388 510.6020186 52 0.5960581 53 0.5901565 54 0.5843134 55 0.5785281 56 0.5728001 57 0.5671288 58 0.5615137 59 0.5559541 60 0.5504496 44.955038 297 334 300 334 334 334 334 334 334 306 309 312 315 318 321 324 334 334 334 334 328 305