Homework Answers
a.
Calculating Monthly Payment,
Using TVM Calculation,
PMT = [PV = 21,000, FV = 0, N = 72, i = 0.05/12]
PMT = $338.20
b.
Interest Paid in Month 1 = 0.05(21,000)/12 = $87.50
Principal paid = 338.20 - 87.50 = $251
Remaining Principal = 21,000 - 250.70 = $20,749
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