You bought a car three years ago for $20,000 and financed $16,000 at 6 percent APR...

You bought a car three years ago for $20,000 and financed $16,000 at 6 percent APR for 60 months. You are now thinking about trading in your vehicle for a new one and would like to know how much you still owe on the loan. Assuming that you have made 36 payments so far, what is the balance remaining on your loan?

Expert Solution

Ans $6979.25

		P =	Regular Payments
		PV =	Loan Amount
		r =	rate of interest
		n =	no of periods

		P =	r (PV)
			1 - (1 + r )^-n

		P =	(6.00%/12)*16000
			1 - (1 / (1 + 6.00%/12)^60))

		P =	80
			0.258627804

		P =	309.32

	Beginning Balance	Interest	Principal	Ending Balance
1	$16,000.00	$80.00	$229.32	$15,770.68
2	$15,770.68	$78.85	$230.47	$15,540.20
3	$15,540.20	$77.70	$231.62	$15,308.58
4	$15,308.58	$76.54	$232.78	$15,075.80
5	$15,075.80	$75.38	$233.95	$14,841.85
6	$14,841.85	$74.21	$235.12	$14,606.74
7	$14,606.74	$73.03	$236.29	$14,370.45
8	$14,370.45	$71.85	$237.47	$14,132.97
9	$14,132.97	$70.66	$238.66	$13,894.31
10	$13,894.31	$69.47	$239.85	$13,654.46
11	$13,654.46	$68.27	$241.05	$13,413.41
12	$13,413.41	$67.07	$242.26	$13,171.15
Year #1 End
13	$13,171.15	$65.86	$243.47	$12,927.68
14	$12,927.68	$64.64	$244.69	$12,682.99
15	$12,682.99	$63.41	$245.91	$12,437.08
16	$12,437.08	$62.19	$247.14	$12,189.94
17	$12,189.94	$60.95	$248.38	$11,941.57
18	$11,941.57	$59.71	$249.62	$11,691.95
19	$11,691.95	$58.46	$250.87	$11,441.09
20	$11,441.09	$57.21	$252.12	$11,188.97
21	$11,188.97	$55.94	$253.38	$10,935.59
22	$10,935.59	$54.68	$254.65	$10,680.94
23	$10,680.94	$53.40	$255.92	$10,425.02
24	$10,425.02	$52.13	$257.20	$10,167.82
Year #2 End
25	$10,167.82	$50.84	$258.49	$9,909.34
26	$9,909.34	$49.55	$259.78	$9,649.56
27	$9,649.56	$48.25	$261.08	$9,388.48
28	$9,388.48	$46.94	$262.38	$9,126.10
29	$9,126.10	$45.63	$263.69	$8,862.40
30	$8,862.40	$44.31	$265.01	$8,597.39
31	$8,597.39	$42.99	$266.34	$8,331.05
32	$8,331.05	$41.66	$267.67	$8,063.38
33	$8,063.38	$40.32	$269.01	$7,794.38
34	$7,794.38	$38.97	$270.35	$7,524.02
35	$7,524.02	$37.62	$271.70	$7,252.32
36	$7,252.32	$36.26	$273.06	$6,979.25

jeff jeffy answered 2 hours ago

John bought a car three years ago for $20,000 for personal use. In 2002, his car was...

John bought a car three years ago for $20,000 for personal use. In 2002, his car was totally destroyed by a tree that fell on the car. John did not have insurance that covered this event. The car’s fair market value before the tree came down was $9,000 and it was worth $0 after the accident. He has no other personal casualty gains or losses and his AGI for the year was $50,000. John’s personal casualty loss is $8,000. True/False and Explain.

A property was financed 5 years ago at 80% of 360,000 and an APR of 3%....

A property was financed 5 years ago at 80% of 360,000 and an APR of 3%. Five years have passed and interest rates have dropped to an APR of 2.65% for a five year mortgage. Required fees for the new mortgage are $1,400. What is the effective cost to refinance the mortgage? A. 2.72% B. 2.96% C. 3.02% D. 3.07%

You have just taken out a $20,000 car loan with a 6% APR, compounded monthly. The...

You have just taken out a $20,000 car loan with a 6% APR, compounded monthly. The loan is for five years. When you make your first payment in one month, how much of the payment will go toward the principal of the loan?

Three years ago, you bought a 12% bond that had 7 years to maturity and a...

Three years ago, you bought a 12% bond that had 7 years to maturity and a yield to maturity of 12%. Today (after the sixth interest payment), you sold the bond when it is yielding 13%. What is your annual rate of return for the three year period? All coupon payments are semi-annual, and the par value is $1,000.

Ms. Cressida bought a car for $48,000 exactly three years ago. After making an up-front...

Ms. Cressida bought a car for $48,000 exactly three years ago. After making an up-front equity payment of $5,000, she borrowed the rest of the car value from her bank in the form of a five-year loan. She negotiated a loan rate of 2.5% APR with semi-annual compounding. She makes loan payments of an equal dollar amount every two weeks (i.e., biweekly), and her first loan payment was due two weeks after she signed the loan contract. (10...

Three years ago you purchased a 15-year $1,000 bond with a coupon rate of 6 percent....

Three years ago you purchased a 15-year $1,000 bond with a coupon rate of 6 percent. You now wish to sell the bond and read that yields are 10 percent. What price should you receive for the bond? a $727.45 b $1,037.20 c $912.55 d $1,135.35

Tom Miller owns a house that he bought 5 years ago for $200,000. He financed the...

Tom Miller owns a house that he bought 5 years ago for $200,000. He financed the purchase with an 80% LTV loan at 7% interest and a 30-year amortization term with monthly payments. Interest rates have since fallen and a new loan (which is equal to the balance of the original loan) is now available at 5.25% interest rate with 4 discount points and is amortized over 25 years with monthly payments. Neither mortgage requires a prepayment penalty. Assume that...

Two years ago, you purchased your first car and financed your purchase with a five-year loan...

Two years ago, you purchased your first car and financed your purchase with a five-year loan at 6.0% p.a. You were making monthly payments of $1,160 on the car loan and you have just made your 24th monthly payment on the car today. Assuming that you have made all 24 payments on time, the current principal balance outstanding on your car loan is closest to: a) $26,170. b) $27,840. c) $38,130. d) $41,760.

Two years ago, you purchased a $20,000 car, putting $4,000 down and borrowing the rest. Your...

Two years ago, you purchased a $20,000 car, putting $4,000 down and borrowing the rest. Your loan was a 36-month fixed rate loan at a stated rate of 7.0% per year. You paid a non-refundable application fee of $100 at that time in cash. Interest rates have fallen during the last two years and a new bank now offers to refinance your car by lending you the balance due at a stated rate of 5.5% per year. You will use...

Calculate the monthly payments on a car loan of $25,000 financed at an APR of 6.5%...

Calculate the monthly payments on a car loan of $25,000 financed at an APR of 6.5% for 36 months, rounded to nearest cent.

Question