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An automobile loan of $22,000 at a nominal rate of 10% compounded monthly for 48 months requires equal end-of-month payments

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Answer #1

For 1st month

Interest payment = 10%*22000 / 12 = 183.33

Repayment of principal = 557.98 - 183.33 = 374.65

For 2nd month

Interest payment = 10%* 21625.35 / 12 = 180.21

Repayment of principal = 557.98 - 180.21 = 377.77

Remaining balance = 21625.35 - 377.77 = 21247.58

For 13th month

Previous balance (12th month) = 144.10*12/10% = 17292.35

Repayment of principal = 557.98 - 144.10 = 413.88

Remaining balance = 17292.35 - 413.88 = 16878.47

This is shown in the tabular form

End of month interest payment Repayment of principal Remaining loan balance
0 0.0 0.0 22000.0
1 183.33 374.65 21625.35
2 180.21 377.77 21247.58
13 144.10 413.88 16878.47
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