Question

Part 2 Attempt 1/10 for 10 pts. How much of your first monthly payment goes towards paying down the outstanding balance in $)? No decime Submit Part 3 Attempt 1/10 for 10 pts. What is the outstanding balance after 1 year if you have made all 12 payments on time? No decime Submit Part 4 Attempt 1/10 for 10 pts. How much of your 13 monthly payment goes towards paying down the outstanding balance in S)? No decims Submit NA

Answer 1

1). PV = 500,000; N = 15*12 = 180; rate = 2.4%/12 = 0.2%, solve for PMT

Monthly payment = 3,310.46 or 3,310

2). Interest paid in 1st month = outstanding balance*0.20% = 1,000

Balance paid in 1st month = monthly payment - interest paid = 3,310.46 - 1,000 = 2,310.46 or 2,310

3). Balance after 12 payments:

We need to find the PV of the loan after 12 payments have been made or 180-12 = 168 payments are pending.

PMT = 3,310.46; N = 168; rate = 0.20%, solve for PV.

PV = 471,967.45 or 471,967

4). Outstanding balance after 12 payments is 471,967.45

Interest paid in 13th balance = 0.2%*outstanding balance = 0.2%*471,967.45 = 943.93

Balance paid in 13th payment = 3,310.46 - 943.93 = 2,366.53 or 2,367