Question

You have just taken out a

$22,000

car loan with a

5%

​APR, compounded monthly. The loan is for five years. When you make your first payment in one​ month, how much of the payment will go toward the principal of the loan and how much will go toward​ interest?  ​(Note: Be careful not to round any intermediate steps less than six decimal​ places.)

When you make your first​ payment,

​$___

will go toward the principal of the loan and

​$____

will go toward the interest.

Answer 1

	P =	Regular Payments
	PV =	Loan Amount
	r =	rate of interest
	n =	no of periods
	P =	r (PV)
		1 - (1 + r )^-n
	P =	(5%/12)*22000
		1 - (1 / (1 + 5%/12)^60))
	P =	91.66666667
		0.22079461
	P =	415.17
	Beginning Balance	Interest	Principal	Ending Balance
1	22000	91.67	323.50	21676.50
		(22000 * 5% / 12)	(415.17 - 91.67)	(22000 - 323.5)
	In first Payment principal of the loan =	323.50
	In first Payment Interest=		91.67