Question

. Amortization Table. You wish to buy a $40,000 car. The bank can finance you with a 3-year loan at a 4 percent APR. If you make a $7,000 down payment on the purchase. What are the monthly payments on your loan? How much will you pay in interest each year?

Answer 1

EMI = Loan / PVAF(r%,n)

r is int Rate per month and n is no. of Months

= $ 33,000 / PVAF(0.33%, 36)

= $ 33,000 / 33.8708

= $ 974.29

Loan AMortization:

Month	Opening Bal	EMI	Int	Principal repay	Closing Bal
1	$ 33,000.00	$ 974.29	$ 110.00	$            864.29	$ 32,135.71
2	$ 32,135.71	$ 974.29	$ 107.12	$            867.17	$ 31,268.54
3	$ 31,268.54	$ 974.29	$ 104.23	$            870.06	$ 30,398.48
4	$ 30,398.48	$ 974.29	$ 101.33	$            872.96	$ 29,525.52
5	$ 29,525.52	$ 974.29	$    98.42	$            875.87	$ 28,649.64
6	$ 28,649.64	$ 974.29	$    95.50	$            878.79	$ 27,770.85
7	$ 27,770.85	$ 974.29	$    92.57	$            881.72	$ 26,889.13
8	$ 26,889.13	$ 974.29	$    89.63	$            884.66	$ 26,004.47
9	$ 26,004.47	$ 974.29	$    86.68	$            887.61	$ 25,116.86
10	$ 25,116.86	$ 974.29	$    83.72	$            890.57	$ 24,226.30
11	$ 24,226.30	$ 974.29	$    80.75	$            893.54	$ 23,332.76
12	$ 23,332.76	$ 974.29	$    77.78	$            896.51	$ 22,436.25
13	$ 22,436.25	$ 974.29	$    74.79	$            899.50	$ 21,536.75
14	$ 21,536.75	$ 974.29	$    71.79	$            902.50	$ 20,634.24
15	$ 20,634.24	$ 974.29	$    68.78	$            905.51	$ 19,728.74
16	$ 19,728.74	$ 974.29	$    65.76	$            908.53	$ 18,820.21
17	$ 18,820.21	$ 974.29	$    62.73	$            911.56	$ 17,908.65
18	$ 17,908.65	$ 974.29	$    59.70	$            914.59	$ 16,994.06
19	$ 16,994.06	$ 974.29	$    56.65	$            917.64	$ 16,076.41
20	$ 16,076.41	$ 974.29	$    53.59	$            920.70	$ 15,155.71
21	$ 15,155.71	$ 974.29	$    50.52	$            923.77	$ 14,231.94
22	$ 14,231.94	$ 974.29	$    47.44	$            926.85	$ 13,305.09
23	$ 13,305.09	$ 974.29	$    44.35	$            929.94	$ 12,375.15
24	$ 12,375.15	$ 974.29	$    41.25	$            933.04	$ 11,442.11
25	$ 11,442.11	$ 974.29	$    38.14	$            936.15	$ 10,505.96
26	$ 10,505.96	$ 974.29	$    35.02	$            939.27	$   9,566.69
27	$   9,566.69	$ 974.29	$    31.89	$            942.40	$   8,624.29
28	$   8,624.29	$ 974.29	$    28.75	$            945.54	$   7,678.75
29	$   7,678.75	$ 974.29	$    25.60	$            948.69	$   6,730.05
30	$   6,730.05	$ 974.29	$    22.43	$            951.86	$   5,778.20
31	$   5,778.20	$ 974.29	$    19.26	$            955.03	$   4,823.17
32	$   4,823.17	$ 974.29	$    16.08	$            958.21	$   3,864.96
33	$   3,864.96	$ 974.29	$    12.88	$            961.41	$   2,903.55
34	$   2,903.55	$ 974.29	$      9.68	$            964.61	$   1,938.94
35	$   1,938.94	$ 974.29	$      6.46	$            967.83	$      971.11
36	$      971.11	$ 974.29	$      3.18	$            971.05	$           0.00

Int Paid in Year1 - 1127.73

Int Paid in Year2 - 697.34

Int Paid in Year3 - 249.37