Question

Suppose that three years ago you borrowed $25,000 to purchase a car. The terms of the loan required monthly payments over five years at an interest rate of 4.5%. Now, you want to pay the loan off in full. How much do you still owe?

Answer 1

Answer : $10,678.10

Calculation :

We can calculate it by using excel. CUMPRINC Formulae gives the principal paid till date.

Formula = -CUMPRINC (rate, Nper, pv, start period, end period, type)

Where,

rate = 0.375% ( 4.5/12 = 0.375%)

Nper = 60 ( 12 * 5)

Pv = 25000 ( i.e. loan amount)

start period = 1 ( i.e. starting period)

End date = 36 (i.e. 12 *3 = 36 means today that is 3 years later)

Type = 0

So we get 14321.9

So this is the principal paid till date, so remaining amount will be

25000 - 14321.9 = 10678.1