A $17,000 car is purchased for $3,200 down with the remainderto be financed ovr

Question

A $17,000 car is purchased for $3,200 down with the remainderto be financed ovr 36 months at 10%. Determine: (a) Monthly payments (b) Total interest (dollars) that would be paid in 36months (c) Cash setlement that would be due when one yearremains (d) Interest savings realized by paying off loan with one yearremaining A $17,000 car is purchased for $3,200 down with the remainderto be financed ovr 36 months at 10%. Determine: (a) Monthly payments (b) Total interest (dollars) that would be paid in 36months (c) Cash setlement that would be due when one yearremains (d) Interest savings realized by paying off loan with one yearremaining

Explanation / Answer

36 months

10%/12

Year

Beginning Balance

Total Payment

Interest Paid

Principal Paid

Ending Balance

TOTALS

Present Value of the Car $17,000 Less: Down Payment $3,000 Present Value of the Amount (PV) $13,800 (a) Calculating MonthlyPayment: Using Excel PMT Function: Number of Periods (Nper)

36 months

Interest rate (Rate)

10%/12

Present Value (PV) -$13,800 Monthly Payment (PMT) $445.29 Calculating Yearly Payment(PMT): Number of years(36/12) 3 Interest Rate (Rate) 10% Present Value (PV) -$13,800 Yearly Payment $5,549.18

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