Use the following to answer questions 20 - 24

On January 1, year 1, AJT borrows $37,500 to purchase a new vehicle by agreeing to a 4.25%, 6-year loan with the

bank. Payments are due at the end of each month with the first installment (vehicle payment) due on January 31, year

1.

After completing the problem, ROUND YOUR ANSWERS TO THE NEAREST DOLLAR. IMPORTANT!!!! when

inputting the monthly interest rate DO NOT ROUND IT (use the math function in the spreadsheet/financial

calculator).

20. Determine the monthly vehicle payment (installment) $_________

21. Determine the interest expense for the first car payment $_________

22. How much of the payment will decrease the amount owed (principal)? $___________

23. After the first vehicle payment is made the amount owed on the vehicle would be: $____________

24. Determine interest expense for the second car payment $_________

Use the following to answer questions 25 - 27

On January 1, year 1, STC borrows $26,000 to purchase a new vehicle by agreeing to a 5.25%, 5-year note with the

bank. Payments of $493.64 are due at the end of each month with the first installment due on January 31, year 1.

ROUND YOUR ANSWERS TO THE NEAREST CENT.

25. After the first car payment (installment) is made the amount owed on the vehicle would be: $_________.__ __

26. Determine interest expense for the second car payment $______.__ __

27. After the Company pays all of the car payments, how much do they owe at the end of the 5 years? $______