Question

You have just taken out a $29,000 car loan with a 4% ​APR, compounded monthly. The loan is for five years. When you make your first payment in one​ month, how much of the payment will go toward the principal of the loan and how much will go toward​ interest?  ​(Note: Be careful not to round any intermediate steps less than six decimal​ places.)

When you make your first​ payment, __________ $

will go toward the principal of the loan and ____________ $

will go toward the interest.  ​(Round to the nearest​ cent.)

Answer 1

a)	P =	Regular Payments
	PV =	Loan Amount
	r =	rate of interest
	n =	no of periods
	P =	r (PV)
		1 - (1 + r )-n
	P =	(4.00%/12)*29000
		1 - (1 / (1 + 4.00%/12)^60))
	P =	96.66666667
		0.180996896
	P =	534.08
b)	Beginning Balance	Interest	Principal	Ending Balance
	29,000.00	96.67	437.41	28,465.92
	will go toward the principal of the loan	437.41
c)	will go toward the interest.	96.67