You have just graduated college and have landed that big job to earn your first real paycheck. To celebrate, you decide to buy the new model Turbo XL. The car costs $50,000 On June 1, Year 1, . You apply a down payment of $2,000 that you saved while working part-time in college at Bob’s Burger Joint. You must finance the remaining portion by borrowing $48,000 using an installment note with a 10% annual interest rate. Payments of $1,217.40 are due each month over the next four years (48 months), beginning July 1, Year 1. The TurboMax dealership provides you with the amortization graphs below.

Required:
1. The amount of each monthly payment over the 48-month period is:
2. The loan balance over the 48-month period is:
3. In the graph showing the 48 car payments, each payment amount is broken into two portions. What do Portion A (bottom) and Portion B (top) represent?
4. The portion of the monthly payment applied to the loan balance over the 48-month period is:
5. The portion of the monthly payment applied to interest over the 48-month period:

Complete these questions by entering your answers in the tabs below.

• The amount of each monthly payment over the 48-month period is:

	Increasing Decreasing Remaining the same

The loan balance over the 48-month period is:

	Increasing Decreasing Remaining the same

In the graph showing the 48 car payments, each payment amount is broken into two portions. What do Portion A (bottom) and Portion B (top) represent?

Portion A
Portion B

The portion of the monthly payment applied to the loan balance over the 48-month period is:

	Increasing Decreasing Remaining the same

The portion of the monthly payment applied to interest over the 48-month period:

	Increasing Decreasing Remaining the same

Transcribed Image Text:

Car Payments Over 48 Months 817.40 $1,400 824.21 $1,200 $1,000 $800 $600 $400 $200 $0 o 24 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 IPortion A of Total Payment (bottom) Portion B of Total Payment (top) 400.00 393.19 Loan Balance Over 48 Months $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 O 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 Car Payments Over 48 Months 817.40 $1,400 824.21 $1,200 $1,000 $800 $600 $400 $200 $0 o 24 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 IPortion A of Total Payment (bottom) Portion B of Total Payment (top) 400.00 393.19 Loan Balance Over 48 Months $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 O 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48

Answer rating: 100% (QA)

Requirement 1 The amount of each monthly payment over the 48month period is ... View the full answer