Amortization schedule with periodic payments. Moulton Motors is advertising the following deal on a new Honda Civic: "Monthly payments of $531.43 for the next 36 months and this beauty can be yours!" The sticker price of the car is $16,000.
-If you bought the car, what interest rate would you be paying in both APR and EAR terms?
-If you bought the car, what monthly interest rate would you be paying?
-What is the amortization schedule of the first six payments?
1.
APR=RATE(36,-531.43,16000)*12=12.00%
EAR=(1+RATE(36,-531.43,16000))^12-1=12.68%
2.
Monthly rate=RATE(36,-531.43,16000)=1.00%
3.
| Payment | Loan beginning balance | Payment | Interest payment | Principal payment | Loan ending balance |
| 1 | 16000 | $531.43 | $160.00 | $371.43 | $15,628.57 |
| 2 | $15,628.57 | $531.43 | $156.29 | $375.14 | $15,253.43 |
| 3 | $15,253.43 | $531.43 | $152.53 | $378.89 | $14,874.53 |
| 4 | $14,874.53 | $531.43 | $148.75 | $382.68 | $14,491.85 |
| 5 | $14,491.85 | $531.43 | $144.92 | $386.51 | $14,105.34 |
| 6 | $14,105.34 | $531.43 | $141.05 | $390.38 | $13,714.96 |
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