Question
Megan purchased a 15,000 car two years ago using an 8 percent, four-year loan. The terms required her to amortize the loan with 4 equal
Megan purchased a 15,000 car two years ago using an 8 percent, four-year loan. The terms required her to amortize the loan with 4 equal end-of-year payments.
She has decided that she would sell the car now, if she could get a price that would pay off the balance of her loan.
- Calculate the amount of annual payments associated with her car loan?
- Fill in the loan amortization schedule?
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| Beginning Balance | Annual Payment | Interest Payment | Principle Repayment | Ending Balance |
| Year 1 |
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| Year 2 |
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| Year 3 |
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| Year 4 |
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- What is the minimum price Megan would need to receive for her car?
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Public Finance
Authors: Harvey S. Rosen
5th Edition
025617329X, 978-0256173291
