I would like to purchase a new Mercedes-Benz that costs $37,500 and will put $4,000 down at the time of purchase. I will get a loan with an interest rate of 4.02%, compounded monthly and have 6 years to pay it off.

a) Based on your calculations, what is your periodic payment for your loan?

b) For the first loan payment, how much money will go towards interest and how much money will go towards the outstanding balance?