Question
Assume that you are planning on purchasing a new car. You are considering financing the $40,000 purchase price using a car loan arranged through the
Assume that you are planning on purchasing a new car. You are considering financing the $40,000 purchase price using a car loan arranged through the car dealership. The terms of the loan are: 8 years of fixed monthly payments, and 2.4% quoted annual periodic rate of interest (this will need to be converted to a monthly rate by dividing the annual rate by 12). Assuming the loan will be completely paid off by the end of the 8 years, determine the monthly payment associated with loan, and then prepare an amortization table in a similar way as shown in the class Excel example. Include all of the months in your table, and make sure you show not only the beginning and ending balance for each month, but also the monthly payment and the breakdown between the part used to pay interest and the part used to pay down the principal. (Hint: use functions and formulas in the first row, and the beginning balance in the second row, in a way that will allow you to copy and paste to the remaining cells of your table)
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