4) (50 points) You borrowed S 20,000 to purchase a new car. The loan was for 4 y

Question

4) (50 points) You borrowed S 20,000 to purchase a new car. The loan was for 4 years at a nominal rate of 6% per year compounded monthly. You have been making equal monthly payments on the loan. You just made your 18th payment. a) (10 points) What is your monthly payment? b) (15 points) How much of your first payment was interest? How much of your current (18h) payment is interest? c) (15 points) How much of the loan has been repaid immediately after the 18" payment? d) (10 points) Based on your answer to part c, determine the total interest paid during the first 18 payments.

Explanation / Answer

We have used Excel formula PMT(rate, Installments, Loan Amount) to calculate EMI

Ans 1)

Monthly Payment is approximately $470

Ans 2)

We paid $100 as First interest payment . Our Current 18th Payment interest is $67

Ans 3)

After 18th Payment $13055 are left as an Outstanding Payment

Ans 4)

Total interest paid till 18th payment is $1509 ( I summed up till 18 periods in Column INterest above)

EMI CALCULATOR LOAN AMOUNT            20,000.00 FILL UP RATE OF INTEREST PER ANNUM 6.00% FILL UP 600% RATE OF INTEREST PER MONTH 0.500% NO OF INSTALLMENT 48 FILL UP 62 EMI 470 CALCULATION OF DETAILS OF EMI MONTHS EMI INTEREST PRINCIPAL REPAYMENT OST PRINCIPAL 0 20000 1 470 100 370 19630 2 470 98 372 19259 3 470 96 373 18885 4 470 94 375 18510 5 470 93 377 18133 6 470 91 379 17754 7 470 89 381 17373 8 470 87 383 16990 9 470 85 385 16605 10 470 83 387 16219 11 470 81 389 15830 12 470 79 391 15440 13 470 77 393 15047 14 470 75 394 14653 15 470 73 396 14256 16 470 71 398 13858 17 470 69 400 13457 18 470 67 402 13055

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