Question: Please completely fill out the table and answer the question below, thank you! Suppose you take out a five-year car loan for $13500, paying an
Please completely fill out the table and answer the question below, thank you!
Suppose you take out a five-year car loan for $13500, paying an annual interest rate of 4%. You make monthly payments of $249 for this loan. Getting started (month 0 ): Here is how the process works. When you buy the car, right at month 0 , you owe the full $13500. Applying the 4% interest to this ( 4% is "4 per $100 " or "0.04 per $1 "), you would owe 0.04$13500=$540 for the year. Since this is a monthly loan, we divide this by 12 to find the interest payment of $45 for the month. You pay $249 for the month, so $45 of your payment goes toward interest (and is never seen again...), and (24945)=$204 pays down your loan. (Month 1): You just paid down $204 off your loan, so you now owe $13296 for the car. Using a similar process, you would owe 0.04$13296=$531.84 for the year, so (dividing by 12), you owe $44.32 in interest for the month. This means that of your $249 monthly payment, $44.32 goes toward interest and $204.68 pays down your loan. The values from above are included in the table. Continue the process for the rest of the first year of the loan. What is the total amount paid in interest over this first year of the loan
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