Question

You take a fixed-rate, amortizing, 7-year loan to buy a car. The loan amount is $130,000, the APR is 4.8%. Payment is expected at the end of each month. what is the scheduled principal payment in your end of month 24 payment assuming all payments were made on time and no prepayments were made?

Answer 1

Firstly, we will calculate monthly payments using BA 2 plus financial calculator:

PV(Loan amount) = $130,000

I/Y(Interest per period) = 0.4%

N(Number of periods) = 7*12 = 84

CMPT PMT

Monthly payment = $1,825.22

Now we will make a laon schedule to find how much principal will be paid at the end of 24 months:

Interest paid = Beginning balance*(R%/12)

Princiapal repaid = Monthly payment - Interest paid

Ending balance = Beginning Balance - Principal repaid

Month	Beginning Balance	Monthly payment	Principal Repaid	Interest	Ending balance
1	130000	1826.216	1306.2	520	128693.8
2	128693.8	1826.216	1311.4	515	127382.3
3	127382.3	1826.216	1316.7	510	126065.7
4	126065.7	1826.216	1322.0	504	124743.7
5	124743.7	1826.216	1327.2	499	123416.5
6	123416.5	1826.216	1332.6	494	122083.9
7	122083.9	1826.216	1337.9	488	120746.0
8	120746.0	1826.216	1343.2	483	119402.8
9	119402.8	1826.216	1348.6	478	118054.2
10	118054.2	1826.216	1354.0	472	116700.2
11	116700.2	1826.216	1359.4	467	115340.8
12	115340.8	1826.216	1364.9	461	113975.9
13	113975.9	1826.216	1370.3	456	112605.6
14	112605.6	1826.216	1375.8	450	111229.8
15	111229.8	1826.216	1381.3	445	109848.5
16	109848.5	1826.216	1386.8	439	108461.7
17	108461.7	1826.216	1392.4	434	107069.3
18	107069.3	1826.216	1397.9	428	105671.4
19	105671.4	1826.216	1403.5	423	104267.9
20	104267.9	1826.216	1409.1	417	102858.7
21	102858.7	1826.216	1414.8	411	101443.9
22	101443.9	1826.216	1420.4	406	100023.5
23	100023.5	1826.216	1426.1	400	98597.4
24	98597.4	1826.216	1431.8	394	97165.6

Principal payment at end of month 24 payment assuming all payments were made on time and no prepayments were made = $1,431.8