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In: Finance

Jebron Lames is considering the purchase of a car, which will cost him $125,000.   He will...

  1. Jebron Lames is considering the purchase of a car, which will cost him $125,000.   He will borrow the entire purchase price and make monthly payments over the next five years. The first payment is due next month and the interest rate is 3.10%. He will owe $____ on the car immediately following the 23rd payment.

Solutions

Expert Solution

EMI = Loan / PVAF (r%., n)

PVAF (r%, n) = SUm [ PVF(r%, n) ]

PVF (r%, n) = 1 /(1+r)^n

r - Int Rate per month

n - No. of months

= $ 125,000 / PVAF (0.2583%, 60)

= $ 125000 / 55.5150

= $ 2251.65

Loan Amortization:

Month opening Bal Instalment Int Principal Repay Closing Bal
1 $ 1,25,000.00 $ 2,251.65 $ 322.92 $ 1,928.73 $ 1,23,071.27
2 $ 1,23,071.27 $ 2,251.65 $ 317.93 $ 1,933.71 $ 1,21,137.56
3 $ 1,21,137.56 $ 2,251.65 $ 312.94 $ 1,938.71 $ 1,19,198.85
4 $ 1,19,198.85 $ 2,251.65 $ 307.93 $ 1,943.72 $ 1,17,255.14
5 $ 1,17,255.14 $ 2,251.65 $ 302.91 $ 1,948.74 $ 1,15,306.40
6 $ 1,15,306.40 $ 2,251.65 $ 297.87 $ 1,953.77 $ 1,13,352.63
7 $ 1,13,352.63 $ 2,251.65 $ 292.83 $ 1,958.82 $ 1,11,393.81
8 $ 1,11,393.81 $ 2,251.65 $ 287.77 $ 1,963.88 $ 1,09,429.94
9 $ 1,09,429.94 $ 2,251.65 $ 282.69 $ 1,968.95 $ 1,07,460.98
10 $ 1,07,460.98 $ 2,251.65 $ 277.61 $ 1,974.04 $ 1,05,486.95
11 $ 1,05,486.95 $ 2,251.65 $ 272.51 $ 1,979.14 $ 1,03,507.81
12 $ 1,03,507.81 $ 2,251.65 $ 267.40 $ 1,984.25 $ 1,01,523.56
13 $ 1,01,523.56 $ 2,251.65 $ 262.27 $ 1,989.38 $    99,534.18
14 $    99,534.18 $ 2,251.65 $ 257.13 $ 1,994.52 $    97,539.67
15 $    97,539.67 $ 2,251.65 $ 251.98 $ 1,999.67 $    95,540.00
16 $    95,540.00 $ 2,251.65 $ 246.81 $ 2,004.83 $    93,535.16
17 $    93,535.16 $ 2,251.65 $ 241.63 $ 2,010.01 $    91,525.15
18 $    91,525.15 $ 2,251.65 $ 236.44 $ 2,015.21 $    89,509.95
19 $    89,509.95 $ 2,251.65 $ 231.23 $ 2,020.41 $    87,489.53
20 $    87,489.53 $ 2,251.65 $ 226.01 $ 2,025.63 $    85,463.90
21 $    85,463.90 $ 2,251.65 $ 220.78 $ 2,030.86 $    83,433.04
22 $    83,433.04 $ 2,251.65 $ 215.54 $ 2,036.11 $    81,396.93
23 $    81,396.93 $ 2,251.65 $ 210.28 $ 2,041.37 $    79,355.56
24 $    79,355.56 $ 2,251.65 $ 205.00 $ 2,046.64 $    77,308.92
25 $    77,308.92 $ 2,251.65 $ 199.71 $ 2,051.93 $    75,256.99
26 $    75,256.99 $ 2,251.65 $ 194.41 $ 2,057.23 $    73,199.75
27 $    73,199.75 $ 2,251.65 $ 189.10 $ 2,062.55 $    71,137.21
28 $    71,137.21 $ 2,251.65 $ 183.77 $ 2,067.87 $    69,069.33
29 $    69,069.33 $ 2,251.65 $ 178.43 $ 2,073.22 $    66,996.12
30 $    66,996.12 $ 2,251.65 $ 173.07 $ 2,078.57 $    64,917.55
31 $    64,917.55 $ 2,251.65 $ 167.70 $ 2,083.94 $    62,833.60
32 $    62,833.60 $ 2,251.65 $ 162.32 $ 2,089.33 $    60,744.28
33 $    60,744.28 $ 2,251.65 $ 156.92 $ 2,094.72 $    58,649.56
34 $    58,649.56 $ 2,251.65 $ 151.51 $ 2,100.13 $    56,549.42
35 $    56,549.42 $ 2,251.65 $ 146.09 $ 2,105.56 $    54,443.86
36 $    54,443.86 $ 2,251.65 $ 140.65 $ 2,111.00 $    52,332.86
37 $    52,332.86 $ 2,251.65 $ 135.19 $ 2,116.45 $    50,216.41
38 $    50,216.41 $ 2,251.65 $ 129.73 $ 2,121.92 $    48,094.49
39 $    48,094.49 $ 2,251.65 $ 124.24 $ 2,127.40 $    45,967.09
40 $    45,967.09 $ 2,251.65 $ 118.75 $ 2,132.90 $    43,834.19
41 $    43,834.19 $ 2,251.65 $ 113.24 $ 2,138.41 $    41,695.79
42 $    41,695.79 $ 2,251.65 $ 107.71 $ 2,143.93 $    39,551.85
43 $    39,551.85 $ 2,251.65 $ 102.18 $ 2,149.47 $    37,402.38
44 $    37,402.38 $ 2,251.65 $    96.62 $ 2,155.02 $    35,247.36
45 $    35,247.36 $ 2,251.65 $    91.06 $ 2,160.59

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