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References Mailings Review View Design Layout Help O Search mes 12 A A A A O SALT - X, * ALAEA - - c| c T Normal 1 No Spac... Heading 1 - IU Font Paragraph Case 1: Amortization with Fixed Total Payment: This moming, you borrowed $48,000 to buy a car. The quoted annual interest rate is 12%. The loan is to be repaid in equal monthly payments over 4 years. The first payment is due one month from today. Fill up the amortization table with Fixed Total Payment for the following months (Months 1, 2 and 48) Month Beginning Balance 1 47480 2 46954.8 Total Interest Payment Payment 520 Principal Payment Ending Balance Cumulative Cumulative Interest Principal 525.2 48 830.06 161643 1. How much is the Principal Payment you make in the second year (Month 13 to 24)? 2. Interest Payment in the second year? 3. If you wanted to pay off your car at the end of the third year (End of month 36). How much is the remaining balance you have to pay then? 4. What can you say about the patterns of monthly principal payment? Interest payment and total payment? I 1/3 le Subtle Em... Emphasis Intense E... Strong Quote Intense Q... Subtle Ref... Intense Re... Styles TUEEL Case 2: Amortization with Fixed Principal Payment Now assume that you want to payback your loan with equal Principal Payment every month for four years. Fill up the following tables: Month Beginning Balance Total Interest Principal Ending Cumulative Cumulative Payment Payment Payment Balance Interest Principal 1 2 48 The shaded cell is for 2 bonus points if you can figure it out. 1. How much is the Principal Payment you make in the fourth month? 2. Interest Payment in the fourth month? 3. If you wanted to pay off your car at the end of the third year. How much is the remaining balance you have to pay then? 4. What can you say about the patterns of monthly principal payment? Interest payment and total payment? Focus

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