Question

2 You borrow money on a self liquidating installemnt loan (equal payments at the end of each year, each payment is part principal part interest) 3 Loan 4 Interest Rate 5 Life (years) 6 Date of Loan $292,000 15.30% 42 January 1, 2018 9 Use the installment method not straight line 10 Do NOT round any interrmediate numbers 11 Do NOT turn this into a monthly problem. 12 13 a) What is the annual payment? 14 b What are the total interest payments? 15 c) After 16 payments have been made, what percentage of the total interest has been paid (round to the nearest percentage point)? 16 d After 16 payments have been made, whet percentage of the total principal has been paid (round to the nearest percentage point) 17 18 Redo the problem if the interest rate is 19 20 for a well designed spreadsheet this should take 30 seconds) 21 22 e) What is the annual payment? 23 f) What are the total interest payments? 24 After 16 payments have been made, what percentage of the total interest has been paid (round to the nearest percentage point)? 25 h After 16 payments have been made, what percentage of the total principal has been paid (round to the nearest percentage point)? 2.00%

Answer 1

Q1.

Loan	292000
Interest Rate	15.30%
Life	42
Annual Payment	44789.33
Total Interest Payment	1589151.85
Total Interest Paid after 16th payment	710143.61
Total Principal Paid after 16th payment	6485.67
% of Total Interest Paid after 16th payment	44.687%
% of Total Principal Paid after 16th payment	2.221%

Year	Installment	Principal Payment	Interest Payment	Loan Outstanding
1	44789.33	113.33	44676.00	291886.67
2	44789.33	130.67	44658.66	291756.00
3	44789.33	150.66	44638.67	291605.34
4	44789.33	173.71	44615.62	291431.63
5	44789.33	200.29	44589.04	291231.34
6	44789.33	230.94	44558.39	291000.40
7	44789.33	266.27	44523.06	290734.13
8	44789.33	307.01	44482.32	290427.13
9	44789.33	353.98	44435.35	290073.15
10	44789.33	408.14	44381.19	289665.01
11	44789.33	470.58	44318.75	289194.42
12	44789.33	542.58	44246.75	288651.84
13	44789.33	625.60	44163.73	288026.24
14	44789.33	721.31	44068.02	287304.93
15	44789.33	831.68	43957.65	286473.25
16	44789.33	958.92	43830.41	285514.33
17	44789.33	1105.64	43683.69	284408.69
18	44789.33	1274.80	43514.53	283133.89
19	44789.33	1469.84	43319.49	281664.05
20	44789.33	1694.73	43094.60	279969.32
21	44789.33	1954.02	42835.31	278015.30
22	44789.33	2252.99	42536.34	275762.31
23	44789.33	2597.70	42191.63	273164.61
24	44789.33	2995.14	41794.19	270169.47
25	44789.33	3453.40	41335.93	266716.07
26	44789.33	3981.77	40807.56	262734.29
27	44789.33	4590.98	40198.35	258143.31
28	44789.33	5293.40	39495.93	252849.91
29	44789.33	6103.29	38686.04	246746.62
30	44789.33	7037.10	37752.23	239709.52
31	44789.33	8113.77	36675.56	231595.74
32	44789.33	9355.18	35434.15	222240.56
33	44789.33	10786.52	34002.81	211454.04
34	44789.33	12436.86	32352.47	199017.18
35	44789.33	14339.70	30449.63	184677.48
36	44789.33	16533.68	28255.65	168143.80
37	44789.33	19063.33	25726.00	149080.47
38	44789.33	21980.02	22809.31	127100.46
39	44789.33	25342.96	19446.37	101757.50
40	44789.33	29220.43	15568.90	72537.06
41	44789.33	33691.16	11098.17	38845.91
42	44789.33	38845.91	5943.42	0.00

Q2.

Loan	292000
Interest Rate	2.00%
Life	42
Annual Payment	10341.85
Total Interest Payment	142357.70
Total Interest Paid after 16th payment	81558.33
Total Principal Paid after 16th payment	83911.27
% of Total Interest Paid after 16th payment	57.29%
% of Total Principal Paid after 16th payment	28.74%

Year	Installment	Principal Payment	Interest Payment	Loan Outstanding
1	10341.85	4501.85	5840.00	287498.15
2	10341.85	4591.89	5749.96	282906.26
3	10341.85	4683.72	5658.13	278222.54
4	10341.85	4777.40	5564.45	273445.14
5	10341.85	4872.95	5468.90	268572.19
6	10341.85	4970.41	5371.44	263601.79
7	10341.85	5069.81	5272.04	258531.97
8	10341.85	5171.21	5170.64	253360.76
9	10341.85	5274.63	5067.22	248086.13
10	10341.85	5380.13	4961.72	242706.00
11	10341.85	5487.73	4854.12	237218.27
12	10341.85	5597.48	4744.37	231620.78
13	10341.85	5709.43	4632.42	225911.35
14	10341.85	5823.62	4518.23	220087.73
15	10341.85	5940.10	4401.75	214147.63
16	10341.85	6058.90	4282.95	208088.73
17	10341.85	6180.08	4161.77	201908.66
18	10341.85	6303.68	4038.17	195604.98
19	10341.85	6429.75	3912.10	189175.23
20	10341.85	6558.35	3783.50	182616.89
21	10341.85	6689.51	3652.34	175927.37
22	10341.85	6823.30	3518.55	169104.07
23	10341.85	6959.77	3382.08	162144.30
24	10341.85	7098.96	3242.89	155045.34
25	10341.85	7240.94	3100.91	147804.40
26	10341.85	7385.76	2956.09	140418.63
27	10341.85	7533.48	2808.37	132885.16
28	10341.85	7684.15	2657.70	125201.01
29	10341.85	7837.83	2504.02	117363.18
30	10341.85	7994.59	2347.26	109368.59
31	10341.85	8154.48	2187.37	101214.11
32	10341.85	8317.57	2024.28	92896.55
33	10341.85	8483.92	1857.93	84412.63
34	10341.85	8653.60	1688.25	75759.03
35	10341.85	8826.67	1515.18	66932.36
36	10341.85	9003.20	1338.65	57929.16
37	10341.85	9183.27	1158.58	48745.89
38	10341.85	9366.93	974.92	39378.96
39	10341.85	9554.27	787.58	29824.69
40	10341.85	9745.36	596.49	20079.33
41	10341.85	9940.26	401.59	10139.07
42	10341.85	10139.07	202.78	0.00