The credit plan at TidBit Computer Store specifies a 10% down payment and an annual interest rate of 12%. Monthly payments are 5% of the listed purchase price, minus the down payment.Write a program that takes the purchase price as input. The program should display a table, with appropriate headers, of a payment schedule for the lifetime of the loan. Each row of the table should contain the following items:The month number (beginning with 1)The current total balance owedThe interest owed for that monthThe amount of principal owed for that monthThe payment for that monthThe balance remaining after paymentThe amount of interest for a month is equal to balance × rate / 12.The amount of principal for a month is equal to the monthly payment minus the interest owed.An example of the program input and output is shown below: ### Understanding Loan Amortization SchedulesThis table demonstrates a simplified loan amortization schedule for a loan with an initial purchase price of $200.#### Table Breakdown:- **Starting Balance**: The principal amount remaining at the beginning of each period.- **Interest to Pay**: The interest due for that period, calculated based on the remaining balance.- **Principal to Pay**: The portion of the payment that will reduce the principal balance.- **Payment**: The total amount paid each period.- **Ending Balance**: The remaining principal balance after the payment is made.#### Detailed Table Explanation:1. **Initial Conditions**: - Starting with a principal balance of $180.00. - Consistent periodic payment of $9.00.2. **Payment Schedule**: - The Interest to Pay starts high and gradually decreases as payments are made. This is due to the decreasing principal balance. - The Principal to Pay initially starts lower and increases with each subsequent payment period. - The Ending Balance decreases progressively, reflecting the reduction in debt after each payment.3. **Progression**: - Over time, as more principal is paid down, the interest portion of each payment decreases, and more of each payment is applied toward reducing the principal. - This results in the Ending Balance steadily decreasing until it ultimately reaches zero.This table effectively illustrates how regular payments affect a loan's principal and interest over time, allowing for the complete payoff of the loan by the end of the term. Understanding this process is essential for managing financial obligations effectively.

As no programing language is mentioned, we code it in python. we will use the following code at the…

Answered: The credit plan at TidBit Computer…

Database System Concepts

7th Edition

ISBN:9780078022159

Author:Abraham Silberschatz Professor, Henry F. Korth, S. Sudarshan

Publisher:Abraham Silberschatz Professor, Henry F. Korth, S. Sudarshan

Chapter1: Introduction

Section: Chapter Questions

Problem 1PE

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The credit plan at TidBit Computer Store specifies a 10% down payment and an annual interest rate of 12%. Monthly payments are 5% of the listed purchase price, minus the down payment.

Write a program that takes the purchase price as input. The program should display a table, with appropriate headers, of a payment schedule for the lifetime of the loan. Each row of the table should contain the following items:

The month number (beginning with 1)
The current total balance owed
The interest owed for that month
The amount of principal owed for that month
The payment for that month
The balance remaining after payment

The amount of interest for a month is equal to balance × rate / 12.

The amount of principal for a month is equal to the monthly payment minus the interest owed.

An example of the program input and output is shown below:

### Understanding Loan Amortization Schedules

This table demonstrates a simplified loan amortization schedule for a loan with an initial purchase price of $200.

#### Table Breakdown:

- **Starting Balance**: The principal amount remaining at the beginning of each period.
- **Interest to Pay**: The interest due for that period, calculated based on the remaining balance.
- **Principal to Pay**: The portion of the payment that will reduce the principal balance.
- **Payment**: The total amount paid each period.
- **Ending Balance**: The remaining principal balance after the payment is made.

#### Detailed Table Explanation:

1. **Initial Conditions**:
- Starting with a principal balance of $180.00.
- Consistent periodic payment of $9.00.

2. **Payment Schedule**:
- The Interest to Pay starts high and gradually decreases as payments are made. This is due to the decreasing principal balance.
- The Principal to Pay initially starts lower and increases with each subsequent payment period.
- The Ending Balance decreases progressively, reflecting the reduction in debt after each payment.

3. **Progression**:
- Over time, as more principal is paid down, the interest portion of each payment decreases, and more of each payment is applied toward reducing the principal.
- This results in the Ending Balance steadily decreasing until it ultimately reaches zero.

This table effectively illustrates how regular payments affect a loan's principal and interest over time, allowing for the complete payoff of the loan by the end of the term. Understanding this process is essential for managing financial obligations effectively.

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