Question
In: Finance
Anna decides to take out a four-year loan for $30,000 to purchase a new car. Her...
Anna decides to take out a four-year loan for $30,000 to purchase a new car. Her loan officer tells her that she will make equal, monthly payments for the loan at an interest rate of 8 percent per year.
What will the balance of the loan be after 2 years of making payments?
Solutions
Expert Solution
Anna has taken a $30,000 loan at an interest rate of 8% for 4 years and is to be repaid in monthly equal payments.
To calculate the balance of the loan after 2 years of making payments, we need to prepare a loan amortizarion schedule.
Monthly payments can be calculated using PMT function in Excel, wherein rate will be interest rate per annum, i.e. 8% divided by 12 because payments are being made monthly. Also, nper will be 48(4*12) and PV will be the loan amount, i,e, $30,000. Then, we need to find the principal part of the payment by deducting interest component from the total payment made each month.
We need to find the loan balance after 24 months of payments.
The schedule is as follows:
The formulas used are as follows:
jeff jeffy answered 2 years agoRelated Solutions
Anna decides to take out a four-year loan for $30,000 to purchase a new car. Her...
Anna decides to take out a four-year loan for $30,000 to
purchase a new car. Her loan officer tells her that she will make
equal, monthly payments for the loan at an interest rate of 8
percent per year.
How much, in total, did Anna pay in interest over the course of
the loan?
You take out a car loan at your local bank for the purchase of a new...
You take out a car loan at your local bank for the purchase of a
new car. The total cost including taxes and preparation costs are:
$25,985. Your bank’s nominal interest rate for car loans is at the
moment 7 1⁄4 % for a 5-year amortization period. Calculate your
monthly payments and the remaining balance after 3 years.
1a. If you take out a car loan for $30,000 for 6 years at 4.5% Simple...
1a. If you take out a car loan for $30,000 for 6 years at 4.5%
Simple interest what is the monthly payment? and How much will you
pay in total for interest at the end of the 6 years?
1b. If you take out a car loan for $30,000 for 6 years at 4.5%
Compound Interest what is the monthly payment? and How much will
you pay in total for interest at the end of the 6 years?
Jenny bought a new car for $30,000. The loan contract asked her to pay $880 per...
Jenny bought a new car for $30,000. The loan contract asked her
to pay $880 per month for 36 months. What is the APR of the auto
loan?
0.30%
3.57%
2.93%
3.37%
3. Suzie financed the purchase of her new car using a 5-year (60-month) loan with an...
3. Suzie financed the purchase of her new car using a 5-year
(60-month) loan with an interest rate of 0.5% per month. Her loan
is for $27,534.18. Answer the following questions:
a.What is her monthly car payment? Your answer must be accurate
to the nearest penny
.b. What will her loan balance be after she makes her 20th
payment? Your answer must be accurate to the nearest dollar.
please I need help with this Q ASAP thanks
You are looking to purchase a new car with the assistance of a $22,000, five-year loan...
You are looking to purchase a new car with the assistance of a
$22,000, five-year loan at an APR of 5.4%, compounded monthly.
Required:
a. What is the monthly payment on this loan?
b. What is the amount of interest and principal on the loan’s
first monthly payment?
c. What is the amount of interest and principal on the loan’s
sixteenth monthly payment?
d. Show a second method to determine the amount of interest and
principal on the loan’s sixteenth...
Assume you take out a loan that you will make payments, once per year, for four...
Assume you take out a loan that you will make payments, once per
year, for four years. Complete the table assuming the loan is for
$10,000 and the interest rate on the loan is 4.25%.
Year
Beginning Balance
Total Payment
Interest Paid
Principal Paid
Ending Balance
1
2
3
4
If you take out a car loan for $35,000, will pay an annual interest rate of...
If you take out a car loan for $35,000, will pay an annual
interest rate of 4% on the loan, and make monthly payments of
$547.58, how many payments will you need to make? -What are you
solving for? -What is your answer?
You purchase a house that costs 800000TL. For this you take out a loan from a...
You purchase a house that costs 800000TL. For this you take out
a loan from a bank for 25 years at 8.8% interest. You will pay your
debt by making equal monthly payments. After 15 years the interest
rates have dropped. Another bank offers you 7.5% interest. You
decide to take out a second loan for the next 10 years, which will
be paid monthly to this new bank and you pay off your total debt to
the first bank....
You purchase a car for 10,000 The car loan is financed with a 5% per year,...
You purchase a car for 10,000
The car loan is financed with a 5% per year, 5 year loan with
annyual payments starting at time 1 (1 year from today) through
time 5
Each payment reduces the principal by a certain amount until the
loan is completely paid off.
What is the interest component of the first payment?
(I am allowed to use the TI-34 and BAII Plus calculators)
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Parallel Arrays This question is in MindTap Cengage Summary In this lab, you use what you...
- 5. You have invested 30 percent of your portfolio in Jacob, Inc., 40 percent is Bella...
- JAVA Write a test program that prompts the user to enter a series of integers and...
- (2) Cite an example on how organizations like Google, Facebook, Youtube etc collect data for image...
- The legal landscape is perpetually changing. Psychologists must remain abreast of these changes to avoid potentially...
- We are evaluating a project that costs $1.68 million, has a six-year life, and has no...
- In C++ Having call-by-reference allows one to use storeback parameters, i.e., parameters whose values are transmitted...
ADVERTISEMENT