3. A person will repay his debt today in 3 years with equal installments of 1000...

3. A person will repay his debt today in 3 years with equal installments of 1000 TL every month. Calculate the amount of debt per year at 1.8% compound interest. (25 points)

Expert Solution

Loan amount=1000/(1.8%/12)*(1-1/(1+1.8%/12)^(12*3))=35019.7067
For first period, Loan beginning balance=Loan amount=35019.7067

For other periods:

Loan beginning balance for a particular period=Loan ending balance for previous period

Payment=1000

Interest payment=Loan beginning balance*rate/12

Principal payment=Payment-Interest payment

Loan ending balance=Loan beginning balance-Principal payment

Payment	Loan beginning balance	Payment	Interest payment	Principal payment	Loan ending balance
1	35019.7067	$1,000.00	$52.53	$947.47	$34,072.24
2	$34,072.24	$1,000.00	$51.11	$948.89	$33,123.34
3	$33,123.34	$1,000.00	$49.69	$950.31	$32,173.03
4	$32,173.03	$1,000.00	$48.26	$951.74	$31,221.29
5	$31,221.29	$1,000.00	$46.83	$953.17	$30,268.12
6	$30,268.12	$1,000.00	$45.40	$954.60	$29,313.52
7	$29,313.52	$1,000.00	$43.97	$956.03	$28,357.49
8	$28,357.49	$1,000.00	$42.54	$957.46	$27,400.03
9	$27,400.03	$1,000.00	$41.10	$958.90	$26,441.13
10	$26,441.13	$1,000.00	$39.66	$960.34	$25,480.79
11	$25,480.79	$1,000.00	$38.22	$961.78	$24,519.01
12	$24,519.01	$1,000.00	$36.78	$963.22	$23,555.79
13	$23,555.79	$1,000.00	$35.33	$964.67	$22,591.12
14	$22,591.12	$1,000.00	$33.89	$966.11	$21,625.01
15	$21,625.01	$1,000.00	$32.44	$967.56	$20,657.45
16	$20,657.45	$1,000.00	$30.99	$969.01	$19,688.44
17	$19,688.44	$1,000.00	$29.53	$970.47	$18,717.97
18	$18,717.97	$1,000.00	$28.08	$971.92	$17,746.04
19	$17,746.04	$1,000.00	$26.62	$973.38	$16,772.66
20	$16,772.66	$1,000.00	$25.16	$974.84	$15,797.82
21	$15,797.82	$1,000.00	$23.70	$976.30	$14,821.52
22	$14,821.52	$1,000.00	$22.23	$977.77	$13,843.75
23	$13,843.75	$1,000.00	$20.77	$979.23	$12,864.52
24	$12,864.52	$1,000.00	$19.30	$980.70	$11,883.81
25	$11,883.81	$1,000.00	$17.83	$982.17	$10,901.64
26	$10,901.64	$1,000.00	$16.35	$983.65	$9,917.99
27	$9,917.99	$1,000.00	$14.88	$985.12	$8,932.87
28	$8,932.87	$1,000.00	$13.40	$986.60	$7,946.27
29	$7,946.27	$1,000.00	$11.92	$988.08	$6,958.19
30	$6,958.19	$1,000.00	$10.44	$989.56	$5,968.63
31	$5,968.63	$1,000.00	$8.95	$991.05	$4,977.58
32	$4,977.58	$1,000.00	$7.47	$992.53	$3,985.04
33	$3,985.04	$1,000.00	$5.98	$994.02	$2,991.02
34	$2,991.02	$1,000.00	$4.49	$995.51	$1,995.51
35	$1,995.51	$1,000.00	$2.99	$997.01	$998.50
36	$998.50	$1,000.00	$1.50	$998.50	$0.00

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