Question

(Annuity number of periods) You've just bought a new flat-screen TV for $3,600 and the store you bought it from offers to let you finance the entire purchase at an annual rate of 11 percent compounded monthly. If you take the financing and make monthly payments of $110, how long will it take to pay off the loan? How much will you pay in interest over the life of the loan? a. The number of years it will take to pay off the loan is years. (Round to one decimal place.) b. The amount you will pay in interest over the life of the loan is $ (Round to the nearest cent.)

Answer 1

Cost of TV bought			3600
Interest rate			11%
EMI			110
Month 1
Particulars			Calculation		Answer
monthly Interest formula			3600*(11%/12)		33
Principle repayment part in EMI for month 1			110-33		77
					110
Principle outstanding after Month 1 EMI payment			3600-77		3,523
Month 2
Particulars			Calculation		Answer
monthly Interest formula			3,523*(11%/12)		32
Principle repayment part in EMI for month 1			110-32		78
					110
Principle outstanding after Month 2 EMI			3,523-78		3,445
Likewise if we continue the above process for remaining months below table will come
S.No	EMI	Int	Prince	Net Outstanding
1	110	33	77	3,523
2	110	32	78	3,445
3	110	32	78	3,367
4	110	31	79	3,288
5	110	30	80	3,208
6	110	29	81	3,127
7	110	29	81	3,046
8	110	28	82	2,964
9	110	27	83	2,881
10	110	26	84	2,797
11	110	26	84	2,713
12	110	25	85	2,628
13	110	24	86	2,542
14	110	23	87	2,455
15	110	23	87	2,368
16	110	22	88	2,280
17	110	21	89	2,190
18	110	20	90	2,101
19	110	19	91	2,010
20	110	18	92	1,918
21	110	18	92	1,826
22	110	17	93	1,733
23	110	16	94	1,638
24	110	15	95	1,543
25	110	14	96	1,448
26	110	13	97	1,351
27	110	12	98	1,253
28	110	11	99	1,155
29	110	11	99	1,055
30	110	10	100	955
31	110	9	101	854
32	110	8	102	752
33	110	7	103	648
34	110	6	104	544
35	110	5	105	439
36	110	4	106	333
37	110	3	107	226
38	110	2	108	119
39	110	1	109	10
		700	3,590
Total Interest Paid			700
No of years		39/12	3.25