Question

In: Economics

Find the amount applied to principle for the third month of a​ 4-year loan of ​$11,600...

Find the amount applied to principle for the third month of a​ 4-year loan of ​$11,600 which charges 4.5 percent compounded monthly with monthly payments.

The amount applied to principle for the third month is

$

​(Round to the nearest​ cent.)

Solutions

Expert Solution

The first step is to calculate the monthly payment on the loan. This is found using the PMT equation

Monthly payment = $ 264.5204

The amount applied to principle for the third month is $ 222.68

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Using the monthly payment, we have to develop the amortization schedule of the loan for the first 3 months. This can be done in excel.

Rahul Sunny answered 7 months ago
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