Wade Ellis buys a new car for $16,447.22. He puts 10% down and obtains a simple interest amortized loan for the rest at 11 1/2% interest for four years. (Round your answers to the nearest cent.) (a) Find his monthly payment. $ (b) Find the total interest. $ (c) Prepare an amortization schedule for the first two months of the loan. Payment Number Principal Portion Interest Portion Total Payment Balance 0 $ 1 $ $ $ $ 2 $ $ $ $
Wade Ellis buys a new car for $16,447.22. He puts 10% down and obtains a simple interest amortized loan for the rest at 11 1/2% interest for four years. (Round your answers to the nearest cent.) (a) Find his monthly payment. $ (b) Find the total interest. $ (c) Prepare an amortization schedule for the first two months of the loan. Payment Number Principal Portion Interest Portion Total Payment Balance 0 $ 1 $ $ $ $ 2 $ $ $ $
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Wade Ellis buys a new car for $16,447.22. He puts 10% down and obtains a simple interest amortized loan for the rest at
11 1/2% interest for four years. (Round your answers to the nearest cent.)
(a) Find his monthly payment.
$
(b) Find the total interest.
$
(c) Prepare an amortization schedule for the first two months of the loan.
$
(b) Find the total interest.
$
(c) Prepare an amortization schedule for the first two months of the loan.
| Payment Number |
Principal Portion |
Interest Portion |
Total Payment |
Balance |
|---|---|---|---|---|
| 0 | $ | |||
| 1 | $ | $ | $ | $ |
| 2 | $ | $ | $ | $ |
Expert Solution
Step 1
a) Actual loan amount = 16,447.22 -10% of 16,447.22 = 14,802.498
Interest (r) = 11.5%
Time (t) = 4 years, n= 12
Monthly payment= P(r/n)/ 1-(1+r/n)^-nt
= 14,802.498*(11.5%/12)/[1-(1+11.5%/12)^(-12*4)
= 141.85727245/(1-0.63266778865)
= $386.1825
His monthly payment is $386.18
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