Amortization of a Loan

EXAMPLE EXERCISES

For the following exercises,

create an amortization table for a $21,500 car loan with 4.5% APR over 72

months.

1. What is the monthly payment?

2. How much is actually paid over the life of the loan? How much interest?

3. How much is saved if you round up to the next $50 increment? Next $100?

For the following exercises, create an amortization table for $135,000 home purchase at 4.6% fixed APR. Remember mortgages are generally paid monthly.

4. 30 years

5. 15 years

6. How do the 15-year and 30-year loans compare in total amount paid and interest paid?

7. How much is saved if you round each payment up to the nearest $100