Question

You want to buy a 2000 truck for 60,000. The bank offers you financing for 5 years at 5%.

What are your loan payments?

3 years after you take the financing you decided to pay off the loan. A 2% premium is charged for early payoffs on the principal. You just made your 36th payment. How much do you have left to pay off?

How much of the 36th payment was principal?

Answer 1

Amount borrowed				60000
Annual rate f interest = 5%
Monthly rate = 5/12 = 0.4167%
Annuity PVF at 0.4167% for 60 months				52.99019
Monthly payment (60000/52.99019)				1132.29
Monthly loan payment = 1132.29
Remaining Instalment left after 36th = 60-36 = 24
Annuity PVF at 0.4167% for 24 periods				22.79381
Principal outstanding after 36th payment				25809.2
	(1132.29*22.79381)
Net amount required to pay off:
Principal outstanding				25809.2
Add: Foreclosure charges @ 2%				516.18
Total amount to be paid				26325.38