Question

You have some extra cash this month and you are considering putting it toward your car loan. Your interest rate is 7.3 %7.3%​, your loan payments are $ 675$675 per​ month, and you have 3636 months left on your loan. If you pay an additional $ 1 comma 400$1,400 with your next regular $ 675$675 payment​ (due in one​ month), how much will it reduce the amount of time left to pay off your​ loan? ​(Note: Be careful not to round any intermediate steps less than 6 decimal​ places.)

Answer 1

Interest rate( r )	7.3%(annual)	0.608%(monthly)
situation	normal	After addition payment
Remaining time(nper)	36
Monthly payment(Pmt)	675
Principle remaining	$21,765.34
	PV(0.608%,36,-675)
additional payment		1400
Remaining Principle of loan(reduction in principle amount)		19822.72	21222.72-1400
g time(nper)		35
New installment amount		$630.47	PMT(0.608%,35,-19822.71)
Reduction in installment amount		$44.53	=675-630.47
Amortization sheet in normal condition
Repayment Number	Opening Balance	Loan Repayment	Interest Charged	Capital Repaid	Closing Balance
1	$21,765.34	$675.00	$132.41	$542.63	$21,222.72
2	$21,222.71	$675.00	$129.10	$545.94	$20,676.77
Amortization sheet after additional payment condition
Repayment Number	Opening Balance	Loan Repayment	Interest Charged	Capital Repaid	Closing Balance
1	$19,822.71	$630.51	$120.59	$509.92	$19,312.79
2	$19,312.79	$630.51	$117.49	$513.02	$18,799.76