Eric borrows $17500 to purchase a used truck. He is able to secures a loran for...

Eric borrows $17500 to purchase a used truck. He is able to secures a loran for 7 years at 4.9% interest compounded monthly, which makes his payment's $246.52. After 7 years off making payments how much would eric still owe ? round to the nearest dollar

Expert Solution

Answer:

Months	Monthly payment	Interest expense	Reduction in carrying amount	Caryying amount
				$17,500.00
1	$246.52	$71.46	$175.06	$17,324.94
2	$246.52	$70.74	$175.78	$17,149.16
3	$246.52	$70.03	$176.49	$16,972.67
4	$246.52	$69.31	$177.21	$16,795.45
5	$246.52	$68.58	$177.94	$16,617.51
6	$246.52	$67.85	$178.67	$16,438.85
7	$246.52	$67.13	$179.39	$16,259.45
8	$246.52	$66.39	$180.13	$16,079.33
9	$246.52	$65.66	$180.86	$15,898.46
10	$246.52	$64.92	$181.60	$15,716.86
11	$246.52	$64.18	$182.34	$15,534.52
12	$246.52	$63.43	$183.09	$15,351.43
13	$246.52	$62.69	$183.83	$15,167.60
14	$246.52	$61.93	$184.59	$14,983.01
15	$246.52	$61.18	$185.34	$14,797.67
16	$246.52	$60.42	$186.10	$14,611.58
17	$246.52	$59.66	$186.86	$14,424.72
18	$246.52	$58.90	$187.62	$14,237.10
19	$246.52	$58.13	$188.39	$14,048.72
20	$246.52	$57.37	$189.15	$13,859.56
21	$246.52	$56.59	$189.93	$13,669.64
22	$246.52	$55.82	$190.70	$13,478.93
23	$246.52	$55.04	$191.48	$13,287.45
24	$246.52	$54.26	$192.26	$13,095.19
25	$246.52	$53.47	$193.05	$12,902.14
26	$246.52	$52.68	$193.84	$12,708.30
27	$246.52	$51.89	$194.63	$12,513.68
28	$246.52	$51.10	$195.42	$12,318.25
29	$246.52	$50.30	$196.22	$12,122.03
30	$246.52	$49.50	$197.02	$11,925.01
31	$246.52	$48.69	$197.83	$11,727.19
32	$246.52	$47.89	$198.63	$11,528.55
33	$246.52	$47.07	$199.45	$11,329.11
34	$246.52	$46.26	$200.26	$11,128.85
35	$246.52	$45.44	$201.08	$10,927.77
36	$246.52	$44.62	$201.90	$10,725.87
37	$246.52	$43.80	$202.72	$10,523.15
38	$246.52	$42.97	$203.55	$10,319.60
39	$246.52	$42.14	$204.38	$10,115.22
40	$246.52	$41.30	$205.22	$9,910.00
41	$246.52	$40.47	$206.05	$9,703.95
42	$246.52	$39.62	$206.90	$9,497.05
43	$246.52	$38.78	$207.74	$9,289.31
44	$246.52	$37.93	$208.59	$9,080.72
45	$246.52	$37.08	$209.44	$8,871.28
46	$246.52	$36.22	$210.30	$8,660.99
47	$246.52	$35.37	$211.15	$8,449.83
48	$246.52	$34.50	$212.02	$8,237.82
49	$246.52	$33.64	$212.88	$8,024.93
50	$246.52	$32.77	$213.75	$7,811.18
51	$246.52	$31.90	$214.62	$7,596.56
52	$246.52	$31.02	$215.50	$7,381.06
53	$246.52	$30.14	$216.38	$7,164.68
54	$246.52	$29.26	$217.26	$6,947.41
55	$246.52	$28.37	$218.15	$6,729.26
56	$246.52	$27.48	$219.04	$6,510.22
57	$246.52	$26.58	$219.94	$6,290.28
58	$246.52	$25.69	$220.83	$6,069.45
59	$246.52	$24.78	$221.74	$5,847.71
60	$246.52	$23.88	$222.64	$5,625.07
61	$246.52	$22.97	$223.55	$5,401.52
62	$246.52	$22.06	$224.46	$5,177.05
63	$246.52	$21.14	$225.38	$4,951.67
64	$246.52	$20.22	$226.30	$4,725.37
65	$246.52	$19.30	$227.22	$4,498.15
66	$246.52	$18.37	$228.15	$4,270.00
67	$246.52	$17.44	$229.08	$4,040.91
68	$246.52	$16.50	$230.02	$3,810.89
69	$246.52	$15.56	$230.96	$3,579.93
70	$246.52	$14.62	$231.90	$3,348.03
71	$246.52	$13.67	$232.85	$3,115.18
72	$246.52	$12.72	$233.80	$2,881.38
73	$246.52	$11.77	$234.75	$2,646.63
74	$246.52	$10.81	$235.71	$2,410.91
75	$246.52	$9.84	$236.68	$2,174.24
76	$246.52	$8.88	$237.64	$1,936.60
77	$246.52	$7.91	$238.61	$1,697.99
78	$246.52	$6.93	$239.59	$1,458.40
79	$246.52	$5.96	$240.56	$1,217.83
80	$246.52	$4.97	$241.55	$976.29
81	$246.52	$3.99	$242.53	$733.75
82	$246.52	$3.00	$243.52	$490.23
83	$246.52	$2.00	$244.52	$245.71
84	$246.52	$1.00	$245.52	$0.19

Interest expense = preceding carring amount *0.004083333(monthly raeye 4.9%)

Reduction in carrying amount =Payment - Interset expense

Carring Amount = preceding carring amoun- Reduction in carring amount

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