|
Answer:
Data given in
question:
Price of new BMW car = $45,000
Trade- in- value of old car = $9,000
Financing Term = 5 years (i.e. 60 months or monthly
installments)
APR or Annual Interest/percentage rate = 6% (so. Monthly
interest rate = 6%/12 = 0.50% or 0.005)
Formula of EMI = [P x R x
(1+R)^N]/[(1+R)^N-1]
Where; P = Loan or principal amount
R = Interest Rate per month
N = No. of monthly installments
Monthly EMI or payment = [(45000-9000)*0.005*
(1+0.005)^60]/[(1+0.005)^60-1]
= $ 695.98 or rounded off to $ 696 per
month
Loan or Installment
Schedule will be as follows:
|
Installment No
|
Opening Balance
|
Installment
Amount
|
Principal
|
Interest
|
Closing Balance
|
|
0
|
45,000
|
9,000
|
9,000
|
-
|
36,000
|
|
1
|
36,000
|
696
|
516
|
180
|
35,484
|
|
2
|
35,484
|
696
|
519
|
177
|
34,965
|
|
3
|
34,965
|
696
|
521
|
175
|
34,444
|
|
4
|
34,444
|
696
|
524
|
172
|
33,920
|
|
5
|
33,920
|
696
|
526
|
170
|
33,394
|
|
6
|
33,394
|
696
|
529
|
167
|
32,865
|
|
7
|
32,865
|
696
|
532
|
164
|
32,333
|
|
8
|
32,333
|
696
|
534
|
162
|
31,799
|
|
9
|
31,799
|
696
|
537
|
159
|
31,262
|
|
10
|
31,262
|
696
|
540
|
156
|
30,722
|
|
11
|
30,722
|
696
|
542
|
154
|
30,180
|
|
12
|
30,180
|
696
|
545
|
151
|
29,635
|
|
13
|
29,635
|
696
|
548
|
148
|
29,087
|
|
14
|
29,087
|
696
|
551
|
145
|
28,536
|
|
15
|
28,536
|
696
|
553
|
143
|
27,983
|
|
16
|
27,983
|
696
|
556
|
140
|
27,427
|
|
17
|
27,427
|
696
|
559
|
137
|
26,868
|
|
18
|
26,868
|
696
|
562
|
134
|
26,307
|
|
19
|
26,307
|
696
|
564
|
132
|
25,742
|
|
20
|
25,742
|
696
|
567
|
129
|
25,175
|
|
21
|
25,175
|
696
|
570
|
126
|
24,605
|
|
22
|
24,605
|
696
|
573
|
123
|
24,032
|
|
23
|
24,032
|
696
|
576
|
120
|
23,456
|
|
24
|
23,456
|
696
|
579
|
117
|
22,877
|
|
25
|
22,877
|
696
|
582
|
114
|
22,295
|
|
26
|
22,295
|
696
|
585
|
111
|
21,711
|
|
27
|
21,711
|
696
|
587
|
109
|
21,124
|
|
28
|
21,124
|
696
|
590
|
106
|
20,533
|
|
29
|
20,533
|
696
|
593
|
103
|
19,940
|
|
30
|
19,940
|
696
|
596
|
100
|
19,344
|
|
31
|
19,344
|
696
|
599
|
97
|
18,744
|
|
32
|
18,744
|
696
|
602
|
94
|
18,142
|
|
33
|
18,142
|
696
|
605
|
91
|
17,537
|
|
34
|
17,537
|
696
|
608
|
88
|
16,928
|
|
35
|
16,928
|
696
|
611
|
85
|
16,317
|
|
36
|
16,317
|
696
|
614
|
82
|
15,703
|
|
37
|
15,703
|
696
|
617
|
79
|
15,085
|
|
38
|
15,085
|
696
|
621
|
75
|
14,465
|
|
39
|
14,465
|
696
|
624
|
72
|
13,841
|
|
40
|
13,841
|
696
|
627
|
69
|
13,214
|
|
41
|
13,214
|
696
|
630
|
66
|
12,584
|
|
42
|
12,584
|
696
|
633
|
63
|
11,951
|
|
43
|
11,951
|
696
|
636
|
60
|
11,315
|
|
44
|
11,315
|
696
|
639
|
57
|
10,675
|
|
45
|
10,675
|
696
|
643
|
53
|
10,033
|
|
46
|
10,033
|
696
|
646
|
50
|
9,387
|
|
47
|
9,387
|
696
|
649
|
47
|
8,738
|
|
48
|
8,738
|
696
|
652
|
44
|
8,086
|
|
49
|
8,086
|
696
|
656
|
40
|
7,430
|
|
50
|
7,430
|
696
|
659
|
37
|
6,771
|
|
51
|
6,771
|
696
|
662
|
34
|
6,109
|
|
52
|
6,109
|
696
|
665
|
31
|
5,443
|
|
53
|
5,443
|
696
|
669
|
27
|
4,775
|
|
54
|
4,775
|
696
|
672
|
24
|
4,103
|
|
55
|
4,103
|
696
|
675
|
21
|
3,427
|
|
56
|
3,427
|
696
|
679
|
17
|
2,748
|
|
57
|
2,748
|
696
|
682
|
14
|
2,066
|
|
58
|
2,066
|
696
|
686
|
10
|
1,380
|
|
59
|
1,380
|
696
|
689
|
7
|
691
|
|
60
|
691
|
696
|
691
|
5
|
-
|
|