Homework Answers
| a | Nominal monthly interest rate=(4.25/12)% | 0.3542% | |||||||||
| b | Amount owed at the time of making the first payment= | $35,473.62 | (34000*((1+0.003542)^12) | ||||||||
| c | Constant Dollar amount payment: | ||||||||||
| Rate | Nominal monthly interest rate= | 0.3542% | |||||||||
| Nper | Number of months of payment12-60 | 49 | |||||||||
| Pv | Amount owed at the time of making the first payment | $35,473.62 | |||||||||
| Type | Payment at beginning of month | 1 | |||||||||
| PMT | Amount of payment every month 12-60 | $787.08 | (Using PMT function of excelwith Rate=0.3542%,Nper=49, Pv=-35473.62, Type=1) | ||||||||
| ExcelCommand: PMT(0.3542%,49,-35473.62,,1) | |||||||||||
| TOTAL PAYMENT =787.08*49= | $38,567.01 | ||||||||||
| A | B | C=A*0.003542 | D=B-C | E=A-D | |||||||
| Month | Beginning Loan Balance | Totalpayment | Interest | Principal | Ending Loan balance | ||||||
| 0 | $0 | $34,000 | |||||||||
| 1 | $34,000.00 | $0 | $120.43 | ($120.43) | $34,120.43 | ||||||
| 2 | $34,120.43 | $0 | $120.85 | ($120.85) | $34,241.28 | ||||||
| 3 | $34,241 | $0 | $121.28 | ($121.28) | $34,362.57 | ||||||
| 4 | $34,363 | $0 | $121.71 | ($121.71) | $34,484.28 | ||||||
| 5 | $34,484 | $0 | $122.14 | ($122.14) | $34,606.42 | ||||||
| 6 | $34,606 | $0 | $122.58 | ($122.58) | $34,729.00 | ||||||
| 7 | $34,729 | $0 | $123.01 | ($123.01) | $34,852.01 | ||||||
| 8 | $34,852 | $0 | $123.45 | ($123.45) | $34,975.45 | ||||||
| 9 | $34,975 | $0 | $123.88 | ($123.88) | $35,099.34 | ||||||
| 10 | $35,099 | $0 | $124.32 | ($124.32) | $35,223.66 | ||||||
| 11 | $35,224 | $0 | $124.76 | ($124.76) | $35,348.42 | ||||||
| 12 | $35,348.42 | $787.08 | $125.20 | $661.88 | $34,686.54 |
   |
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