Question

In: Accounting

A loan is taken out for $25,000 from ACME Credit Union at 9% APR, compounded monthly....

A loan is taken out for $25,000 from ACME Credit Union at 9% APR, compounded monthly. The loan is to be repaid in equal monthly payments over a 5-year period.

Find the:

1) loan payment amount,

2) interest payment in the 25th period,

3) principal payment in the 25th period,

4) the unpaid principle after the 25th payment,

5) and the loan pay-off amount at the end of the 25th period

Solutions

Expert Solution

Period Opening Interest Payment Closing
1 25000 187.5 518.96 24668.54
2 24668.54 185.01 518.96 24334.5941
3 24334.59 182.51 518.96 23998.1435
4 23998.14 179.99 518.96 23659.1696
5 23659.17 177.44 518.96 23317.6534
6 23317.65 174.88 518.96 22973.5758
7 22973.58 172.30 518.96 22626.9176
8 22626.92 169.70 518.96 22277.6595
9 22277.66 167.08 518.96 21925.7819
10 21925.78 164.44 518.96 21571.2653
11 21571.27 161.78 518.96 21214.0898
12 21214.09 159.11 518.96 20854.2354
13 20854.24 156.41 518.96 20491.6822
14 20491.68 153.69 518.96 20126.4098
15 20126.41 150.95 518.96 19758.3979
16 19758.4 148.19 518.96 19387.6259
17 19387.63 145.41 518.96 19014.0731
18 19014.07 142.61 518.96 18637.7186
19 18637.72 139.78 518.96 18258.5415
20 18258.54 136.94 518.96 17876.5206
21 17876.52 134.07 518.96 17491.6345
22 17491.63 131.19 518.96 17103.8617
23 17103.86 128.28 518.96 16713.1807
24 16713.18 125.35 518.96 16319.5695
25 16319.57 122.40 518.96 15923.0063
26 15923.01 119.42 518.96 15523.4689
27 15523.47 116.43 518.96 15120.9349
28 15120.93 113.41 518.96 14715.3819
29 14715.38 110.37 518.96 14306.7873
30 14306.79 107.30 518.96 13895.1282
31 13895.13 104.21 518.96 13480.3816
32 13480.38 101.10 518.96 13062.5245
33 13062.52 97.97 518.96 12641.5334
34 12641.53 94.81 518.96 12217.3849
35 12217.38 91.63 518.96 11790.0553
36 11790.06 88.43 518.96 11359.5207
37 11359.52 85.20 518.96 10925.7571
38 10925.76 81.94 518.96 10488.7403
39 10488.74 78.67 518.96 10048.4459
40 10048.45 75.36 518.96 9604.84919
41 9604.849 72.04 518.96 9157.92556
42 9157.926 68.68 518.96 8707.65
43 8707.65 65.31 518.96 8253.99738
44 8253.997 61.90 518.96 7796.94236
45 7796.942 58.48 518.96 7336.45943
46 7336.459 55.02 518.96 6872.52287
47 6872.523 51.54 518.96 6405.1068
48 6405.107 48.04 518.96 5934.1851
49 5934.185 44.51 518.96 5459.73148
50 5459.731 40.95 518.96 4981.71947
51 4981.719 37.36 518.96 4500.12237
52 4500.122 33.75 518.96 4014.91328
53 4014.913 30.11 518.96 3526.06513
54 3526.065 26.45 518.96 3033.55062
55 3033.551 22.75 518.96 2537.34225
56 2537.342 19.03 518.96 2037.41232
57 2037.412 15.28 518.96 1533.73291
58 1533.733 11.50 518.96 1026.27591
59 1026.276 7.70 518.96 515.012977
60 515.013 3.86 518.96 -0.0844253
6138 31138

a. Loan Payment Amount = $ 31138

b. Interest Payment in 25th period = $ 122.40

c. Principal Payment in 25th period = $ 396.56 ( 518.96 - 122.40)

d. Unpaid Principal Amount after the 25th payment = $ 15923

e. Loan Pay off Amount at the end of 25th period = $ 18163.60 (Calculating sum of payments to be made from 26th period till 60th) (518.96 * 35)


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