Question

You have just taken out a $28,000 car loan with a 6%​APR, compounded monthly. The loan...

You have just taken out a $28,000 car loan with a 6%​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.  ​(Round to the nearest​ cent.)

Homework Answers

Answer #1
P = Regular Payments
PV = Loan Amount
r = rate of interest
n = no of periods
P = r (PV)
1 - (1 + r )^-n
P = (6%/12)*28000
1 - (1 / (1 + 6%/12)^60))
P = 140
0.258627804
P = 541.32
Beginning Balance Interest Principal Ending Balance
1 28000.00 140.00 401.32 27458.68
(28000 * 6% * 1/12) (541.32 - 140) (28000 - 401.32)
Principal in First Payment 401.32
Interest in First Payment 140.00
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