you are planning to borrow $10,000 to buy a new car. the loan is being made...

you are planning to borrow $10,000 to buy a new car. the loan is being made to you ag 8.0% annual percentage rate. you will make monthly payment for four years. how mi h of the third monthly payment will go to the paymebt of principal

Expert Solution

	Monthly rate(M)=	yearly rate/12=	0.67%	Monthly payment=	244.13
Month	Beginning balance (A)	Monthly payment	Interest = M*A	Principal paid	Ending balance
1	10000.00	244.13	66.67	177.46	9822.54
2	9822.54	244.13	65.48	178.65	9643.89
3	9643.89	244.13	64.29	179.84	9464.06
4	9464.06	244.13	63.09	181.04	9283.02
5	9283.02	244.13	61.89	182.24	9100.78
6	9100.78	244.13	60.67	183.46	8917.32
7	8917.32	244.13	59.45	184.68	8732.64
8	8732.64	244.13	58.22	185.91	8546.73
9	8546.73	244.13	56.98	187.15	8359.58
10	8359.58	244.13	55.73	188.40	8171.18
11	8171.18	244.13	54.47	189.65	7981.52
12	7981.52	244.13	53.21	190.92	7790.60
13	7790.60	244.13	51.94	192.19	7598.41
14	7598.41	244.13	50.66	193.47	7404.94
15	7404.94	244.13	49.37	194.76	7210.18
16	7210.18	244.13	48.07	196.06	7014.11
17	7014.11	244.13	46.76	197.37	6816.75
18	6816.75	244.13	45.44	198.68	6618.06
19	6618.06	244.13	44.12	200.01	6418.05
20	6418.05	244.13	42.79	201.34	6216.71
21	6216.71	244.13	41.44	202.68	6014.03
22	6014.03	244.13	40.09	204.04	5809.99
23	5809.99	244.13	38.73	205.40	5604.60
24	5604.60	244.13	37.36	206.77	5397.83
25	5397.83	244.13	35.99	208.14	5189.69
26	5189.69	244.13	34.60	209.53	4980.15
27	4980.15	244.13	33.20	210.93	4769.23
28	4769.23	244.13	31.79	212.33	4556.89
29	4556.89	244.13	30.38	213.75	4343.14
30	4343.14	244.13	28.95	215.17	4127.97
31	4127.97	244.13	27.52	216.61	3911.36
32	3911.36	244.13	26.08	218.05	3693.30
33	3693.30	244.13	24.62	219.51	3473.80
34	3473.80	244.13	23.16	220.97	3252.83
35	3252.83	244.13	21.69	222.44	3030.38
36	3030.38	244.13	20.20	223.93	2806.46
37	2806.46	244.13	18.71	225.42	2581.04
38	2581.04	244.13	17.21	226.92	2354.11
39	2354.11	244.13	15.69	228.44	2125.68
40	2125.68	244.13	14.17	229.96	1895.72
41	1895.72	244.13	12.64	231.49	1664.23
42	1664.23	244.13	11.09	233.03	1431.20
43	1431.20	244.13	9.54	234.59	1196.61
44	1196.61	244.13	7.98	236.15	960.46
45	960.46	244.13	6.40	237.73	722.73
46	722.73	244.13	4.82	239.31	483.42
47	483.42	244.13	3.22	240.91	242.51
48	242.51	244.13	1.62	242.51	0.00
Where
Interest paid = Beginning balance * Monthly interest rate
Principal = Monthly payment – interest paid
Ending balance = beginning balance – principal paid
Beginning balance = previous Month ending balance

Percentage of principal in 3rd month = 179.84/244.13 = 73.67%

jeff jeffy answered 2 weeks ago

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