You have just purchased a car and taken out a $50,000 loan. The loan has a 5-year term with monthly payments and an APR of 6%.

a. How much will you pay in interest, and how much will you pay in principal, during the first month, second month, first year? (Hint: Compute the loan balance after 1 month, 2 months and 1 year)?

b. How much will you pay in interest, and how much will you pay in principal, during the fourth year (i.e., between 3 and 4 years from now)?