Question

19. You have just taken out an installment loan for $125,000. Assume that the loan will be repaid in 12 equal monthly installments of $14,909.63 and that the first payment will be due one month from today. How much of your fifth monthly payment will go toward the repayment of the principle?

Answer 1

Ans $ 9354.49 will go toward the repayment of the principle in fifth monthly payment.

P =	Regular Payments
PV =	Loan Amount
r =	rate of interest
n =	no of periods
P =	r (PV)
	1 - (1 + r )-n
14909.63 =	(x%/12)*125000
	1 - (1 / (1 + x%/12)^12))
x=	72%

	Beginning Balance	Interest	Principal	Ending Balance
1	$125,000.00	$7,500.00	$7,409.63	$117,590.37
2	$117,590.37	$7,055.42	$7,854.21	$109,736.16
3	$109,736.16	$6,584.17	$8,325.46	$101,410.71
4	$101,410.71	$6,084.64	$8,824.99	$92,585.72
5	$92,585.72	$5,555.14	$9,354.49	$83,231.23