Prescott Bank offers you a five-year loan for $56,000 at an annual interest rate of 6.75 percent. What will your annual loan payment be? |
Annual rate(M)= | yearly rate/12= | 6.75% | Annual payment= | 13566.58 | |
Year | Beginning balance (A) | Annual payment | Interest = M*A | Principal paid | Ending balance |
1 | 56000.00 | 13566.58 | 3780.00 | 9786.58 | 46213.42 |
2 | 46213.42 | 13566.58 | 3119.41 | 10447.18 | 35766.24 |
3 | 35766.24 | 13566.58 | 2414.22 | 11152.36 | 24613.88 |
4 | 24613.88 | 13566.58 | 1661.44 | 11905.14 | 12708.74 |
5 | 12708.74 | 13566.58 | 857.84 | 12708.74 | 0.00 |
Where |
Interest paid = Beginning balance * Annual interest rate |
Principal = Annual payment – interest paid |
Ending balance = beginning balance – principal paid |
Beginning balance = previous Year ending balance |
Get Answers For Free
Most questions answered within 1 hours.