Question

You have just purchased a car and taken out a $37,000 loan. The loan has a​ five-year term with monthly payments and an APR of 6.1%.

a. How much will you pay in​ interest, and how much will you pay in​ principal, during the first​ month, second​ month, and first​ year? (Hint: Compute the loan balance after one​ month, two​ months, and one​ year.)

b. How much will you pay in​ interest, and how much will you pay in​ principal, during the fourth year​ (i.e., between three and four years from​ now)?

​(Note: Be careful not to round any intermediate steps less than six decimal​ places.)

Answer 1

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