Homework Answers
Ans a) $ 802.54
| P = | Regular Payments | |||
| PV = | Loan Amount | |||
| r = | rate of interest | |||
| n = | no of periods | |||
| P = | r (PV) | |||
| 1 - (1 + r )-n | ||||
| P = | (9%)*2600 | |||
| 1 - (1 / (1 + 9%)^4)) | ||||
| P = | 234 | |||
| 0.291574789 | ||||
| P = | 802.54 | |||
| Ans b) | Beginning Balance | Interest | Principal | Ending Balance |
| 1 | $2,600.00 | $234.00 | $568.54 | $2,031.46 |
| 2 | $2,031.46 | $182.83 | $619.71 | $1,411.75 |
| 3 | $1,411.75 | $127.06 | $675.48 | $736.27 |
| 4 | $736.27 | $66.26 | $736.27 | $0.00 |
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