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You purchase a fully loaded Honda Accord with an MSRP of $ 3 2 , 0 0 0 for $ 2 7 , 0 0
You purchase a fully loaded Honda Accord with an MSRP of $ for $You pay the tax of $ up front and put down $ The dealer offers a simple interest installment loan with an annual rate of for years. The projected resale value of the car after years is $ Questions Compute monthly loan payments steps: Compute Loan Value Purchase Price Given Down Payment Given Loan Value Convert annual loan term to # of months and interest rate to monthly Interest rate should be in decimal form Use Excel formula to compute monthly payment PMTrate period, PV Pull these from steps and Create monthly amortization schedule steps: Enter column headings: Beginning Balance BB Monthly Payment PMT Monthly Interest INT Monthly Principal Repaid PRINC Ending Balance EB Enter months by # in first row; first row cell for rest Enter first BB pull loan value from question Enter first PMT pull from question ; anchor row using $ Compute first INT: Multiply BB by Monthly interest rate from Question ; anchor using $ Compute first PRINC: PMT INT Compute first EB: BB PRINC Copy down first row until end of loan term Go to second row of amortization schedule, first column BB & pull EB from first row. Copy this formula down to end of loan term Check to be sure EB in last month of loan term Enter SUM formula at bottom to sum PMT INT, PRINC columns Check to be sure PRINC sum Loan Value from Question Compute total interest Use sum of INT column computed in Question Compute total cash outflow Down Payment Total of PMT column from Question Up front tax payment Total Cash Outflow Compute amount you would net after selling car at years Sale Price at End of Yr Given Loan Balance Remaining at end of Yr EB in Mo Amount Netted From Selling Car at End of Yr Does the principal portion of the payment increase or decrease over time? Review the PRINC column Does the interest portion of the payment increase or decrease over time? Review the INT column
You purchase a fully loaded Honda Accord with an MSRP of $ for $You pay the tax of $ up front and put down $ The dealer offers a simple interest installment loan with an annual rate of for years. The projected resale value of the car after years is $
Questions
Compute monthly loan payments
steps:
Compute Loan Value
Purchase Price Given
Down Payment Given
Loan Value
Convert annual loan term to # of months and interest rate to monthly
Interest rate should be in decimal form
Use Excel formula to compute monthly payment
PMTrate period, PV
Pull these from steps and
Create monthly amortization schedule
steps:
Enter column headings:
Beginning Balance BB
Monthly Payment PMT
Monthly Interest INT
Monthly Principal Repaid PRINC
Ending Balance EB
Enter months by #
in first row; first row cell for rest
Enter first BB pull loan value from question
Enter first PMT pull from question ; anchor row using $
Compute first INT: Multiply BB by Monthly interest rate from Question
; anchor using $
Compute first PRINC: PMT INT
Compute first EB: BB PRINC
Copy down first row until end of loan term
Go to second row of amortization schedule, first column BB & pull EB
from first row. Copy this formula down to end of loan term
Check to be sure EB in last month of loan term
Enter SUM formula at bottom to sum PMT INT, PRINC columns
Check to be sure PRINC sum Loan Value from Question
Compute total interest
Use sum of INT column computed in Question
Compute total cash outflow
Down Payment
Total of PMT column from Question
Up front tax payment
Total Cash Outflow
Compute amount you would net after selling car at years
Sale Price at End of Yr Given
Loan Balance Remaining at end of Yr EB in Mo
Amount Netted From Selling Car at End of Yr
Does the principal portion of the payment increase or decrease over
time?
Review the PRINC column
Does the interest portion of the payment increase or decrease over time?
Review the INT column
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