You have just taken out a $20,000 with a 6% APR, car loan compounded monthly. The loan is for five years. When you make your first payment in one month, how much of the payment will go toward the principal of the loan, and how much will go toward interest?

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter4: Time Value Of Money
Section4.17: Amortized Loans
Problem 1ST
icon
Related questions
Question
100%

Need help with this accounting question

You have just taken out a $20,000
with a 6% APR,
car loan
compounded monthly. The loan is for
five years. When you make your first
payment in one month, how much of
the payment will go toward the
principal of the loan, and how much
will go toward interest?
Transcribed Image Text:You have just taken out a $20,000 with a 6% APR, car loan compounded monthly. The loan is for five years. When you make your first payment in one month, how much of the payment will go toward the principal of the loan, and how much will go toward interest?
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Corporate Fin Focused Approach
Corporate Fin Focused Approach
Finance
ISBN:
9781285660516
Author:
EHRHARDT
Publisher:
Cengage