551651221960412106458971136188N 9781305635975d360119 MINDTAP HW 04- Time Value o

Question

551651221960412106458971136188N 9781305635975d360119 MINDTAP HW 04- Time Value of Money Back to Assignmen Attempts: 13. Creating an amortization schedule Keep the Highest: 4 Ater Shipra got a job, the first thing she bought was a new car. She took out an amortized koan for $25,000-with no (50) down payment. She agreed to pay or the loan by making annual payments for the next four years at the end of each year. Her bank is charging her an nterest rate of 8% year. Yesterdar she called to ask that you help her compute the annual payments necessary to repay her loan. Calculate the annual payment and complete the folowing loan amortization table Beginning Principal ear Amount Payment Paid Ending Balance 1 $25,000.00 $0.00 O Type here to search

Explanation / Answer

Principal amount = 25000

PVIFA at 8% interest for 4 years = [ 1 - (1+r)-n ] / r = [ 1 - (1.08)-4 ] / 0.08 = 3.31212684

Annual Installment ( Payment ) = Principal amount / PVIFA

= 25000 / 3.31212684 = 7548

Kindly rate my answer .......... comment for any further assistence ....... all the best.

Year Beginning Amount Payment Interest Paid Principal Paid Ending Balance 1 25000 7548 2000 5548 19452 2 19452 7548 1556 5992 13460 3 13460 7548 1077 6471 6989 4 6989 7548 559 6989 0

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