Question

You borrowed a 70,000$ from a local bank to be repaid over 12 months at an interest rate of 1%

Create a table (using Excel) showing each month’s interest in $ (I), principal repayment, and amount of principal remaining at the end of each month.

Suppose that you decided to pay out the remaining principal all at once after few monthly payments (<12), how much will you pay? Use two methods (table breakdown and the discounted annuity method).

Answer 1

Author. pmt(190, 12,70000) calculation of monthly interest, principle repayment and principle outstanding at end of each month ($6,219.42) emi principal $70,000.00 period Emi interest rate p.m. 136; principle interest principle outstanding $70,000.00 $64,480.58 $58,905.17 opening 1 ($6,219.42) ($5,519.42) $700.00 2($6,219.42) ($5,575.42) $644.00 ($6,219.42) ($5,630.42) $589.00 4 (56,219.42) ($5,687.42) $532.00 5(S6,219.42) ($5,744.42) $475.00 6 $6,219.42) ($5,801.42) $418.00 7 ($6,219.42) ($5,859.42) $360.00 8 ($6,219,42) ($5,918.42) $301.00 9 ($6,219.42) ($5,977.42) $242.00 $53,274.75 $47,587.34 1,842.92 $36,041.51 $30,182.09 $24,263.68 $18,286.26 $12,248.85 $6,151.43 11 -..:-(S6,219.42)ゴS6,097:42) $122.00 12 ($6,219.42) $6,158.42 $61.00 _ 150,98) ;

2 Calculation of terest and principal outstanding if remaining principal paid all once at end of 7th month ($6,219.42) interest ratep.m. 1% emi principa period Emi $70,000.00 principle interest balance amount paid prínciple outstanding $70,000.00 $64,480.58 $58,905.17 $53,274.75 $47,587.34 $41,842.92 $36,041.51 0.00 $0.00 $0.00 $0.00 $0.00 $0.00 opening 1($6,219.42) ($5,519.42) $700.00 2($6,219.42) ($5,575.42)1 $644.00i 3($6,219.42) ($5,630.42) $589.00 4$6,219.42) ($5,687.42) $532.00 (6,219.42) ($5,744.42) $475.00 6| ($6,219.42) ($5,801.42):-$418.00 | 7($6,219.42) ($5,859.42) $ $360.00 $0.00$0.00 $0.000.00$0.00 $0.0o $0.000.00$0.00 $0.00$0.00$0.00 $29,822.0!9 8 .00 10$ $0.00$0.00 12-

3 Discounted annuity method $70,000 Amount borrowed Interest rate pm period in months 1%; 12 pmt ($6,219.42) present value $70,000.00 future value $78,877.75 -FV(E51,E52,D54)