Hi, can you please answer these questions it will be dearly appreciated :) Is th
ID: 2731311 • Letter: H
Question
Hi, can you please answer these questions it will be dearly appreciated :)
Is the ones marked true right?
Thanks! :)
After Shipra got a job, the first thing she bought was a car. She took out a loan for $35,000, with zero down payment. She agreed to pay off the loan by making annual payments for the next four years at the end of each year. Her bank is charging her an interest rate of 6%. You are helping Shipra figure out her annual payments to pay off her loan. Calculate the annual payment and complete the following loan amortization table: Beginning Amount $35,000.00 Interest Paid $2,100.00 Principal Paid Year Payment Ending Balance 4 $0.01Explanation / Answer
First we need to calculate the the payment each year that is given by =pmt(rate,nper,pv) in excel where rate = 0.06, nper = 4, pv =35,000.
So payment =pmt(0.06,4,35000) = 10,100.70
The amortization table is as shown below:
Savings at the end of the year is calculated as =fv(rate,nper,pmt,pv,type) .For the end of the year, we make type =0. So her savings will be =fv(0.05,5,1480,0,0) = 8,177.93 (Option C)
If her savings is done at the beginning, we make type =1 in the above formula, so =fv(0.05,5,1480,0,1) = 8,586.83
Lastlly, the ones marked true are correct
Year Beginning Amount Payment Interest Paid Principal Paid Ending Balance 1 35,000.00 10,100.70 2,100.00 8,000.70 26,999.30 2 26,999.30 10,100.70 1,619.96 8,480.74 18,518.55 3 18,518.55 10,100.70 1,111.11 8,989.59 9,528.96 4 9,528.96 10,100.70 571.74 9,528.96 0.00Related Questions
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