Suppose you borrowed $24,000 for 4 years with quarterly payments at an APR of 8%
ID: 2655680 • Letter: S
Question
Suppose you borrowed $24,000 for 4 years with quarterly payments at an APR of 8%. What is the quarterly payment?
Amortize the first four payments. Use the table below:
Payment number Payment Interest Principal Remaining Balance
1 _______ _____ _______ _____________
2 _______ _____ _______ _____________
3 _______ _____ _______ _____________
4 _______ _____ _______ _____________
How much in interest will you pay over the life of the loan? __________
Explanation / Answer
Suppose you borrowed $24,000 for 4 years with quarterly payments at an APR of 8%. What is the quarterly payment?
Quarterly payment = pmt(rate,nper,pv,fv)
rate = 8%/4 =2%
nper = 4*4 = 16
pmt = ?
pv = 24000
fv = 0
Quarterly payment = pmt(2%,16,-24000,0)
Quarterly payment = $ 1767.60
Amortize the first four payments. Use the table below:
How much in interest will you pay over the life of the loan?
Total Amount Paid = 1767.60*16
Total Amount Paid = 28,281.60
Interest will you pay over the life of the loan = Total Amount Paid - Loan Amount
Interest will you pay over the life of the loan = 28281.60 - 24000
Interest will you pay over the life of the loan = $ 4281.60
Payment number Payment Interest Principal Remaining Balance 1 1,767.60 480.00 1,287.60 22,712.40 2 1,767.60 454.25 1,313.35 22,686.65 3 1,767.60 453.73 1,313.87 22,686.13 4 1,767.60 453.72 1,313.88 22,686.12Related Questions
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