Travis bought a new Corvette Z06 for $100,000. He got a 60 month loan for $68100...

Travis bought a new Corvette Z06 for $100,000. He got a 60 month loan for $68100 at a nominal rate of 6.500% per year compounded monthly, with uniform monthly payments starting one month from the date of purchase.

a. What were his monthly car payments?

b. after 24 months how much would he still owe?

c. He sold the car at the end of 36 months for $60,000. What was the payoff. (remember to add the last payment)

d. How much of his twelfth payment was interest?

e.How much of his twelfth payment was equity?

Expert Solution

a) Monthly payments = $1332.45

Installment = PMT(rate/12, no.of months,principal)

=PMT(6.5%/12,60,68100)

b) After 24 months, he would still owe $47968.37 (Refer table below)

c) $309.88 was interest in his 12th payment (Refer table below)

d) $1022.57 was equity in his 12th payment

Calculation:

Rahul Sunny answered 2 years ago

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