# Amortization Schedules Retail Price: \$79,665.00 Tax : 6.25% (0.065) Initial amount (Borrowed): \$10,000 Annual Payments: 12 Total Payments: 60 Annual interest.

## Presentation on theme: "Amortization Schedules Retail Price: \$79,665.00 Tax : 6.25% (0.065) Initial amount (Borrowed): \$10,000 Annual Payments: 12 Total Payments: 60 Annual interest."— Presentation transcript:

Amortization Schedules Retail Price: \$79,665.00 Tax : 6.25% (0.065) Initial amount (Borrowed): \$10,000 Annual Payments: 12 Total Payments: 60 Annual interest rate: 14.24%(0.1424)

TOTAL PRICE Tax = 79,665.00(.0625) = \$4979.0625 Cost (Retail + Tax) = 79,665.00 + 4979.0625 = \$84644.0625 Cost – Down Payment =Loan Amount =84644.0625 – 10000 = \$74,644.0625

Monthly Interest = Annual Interest = 14.24 0.0119 12 12 (P.= \$74664.06 m.i. = 0.0119 # months = 12 # years = 5 ) 74664.06 (0.0119) Monthly Payment = \$1748.16 1- (1+(0.0119 )) -12x5 MONTHLY INTEREST

Payments #1 & #2 Payment #2 Interest On Unpaid Balance = \$73804.41 x 0.0119 = \$878.27 Amount Paid Toward Principle = 1748.61 – 878.27 = \$869.89 New Balance = 73804.41 – 869.89 = \$72934.52 Payment #1 Interest On Unpaid Balance = 74664.0625 x 0.0119 = \$888.50 Amount Paid Toward Principle = 1748.61 - 888.50 = \$859.66 New Balance = 74664.06 – 859.66 = \$73804.41

Amortization Table (12 Months) Payment # Interest On Unpaid Balance Amount Paid Toward PrincipleNew Balance \$74664.06 Monthly Payment 1\$888.50\$859.66\$73804.41\$1748.16 2\$878.27\$869.89\$72934.52\$1748.16 3\$867.92\$880.24\$72054.28\$1748.16 4\$857.45\$890.71\$71163.57\$1748.16 5\$846.85\$901.31\$70262.25\$1748.16 6\$836.12\$912.04\$69350.21\$1748.16 7\$825.27\$922.89\$68427.32\$1748.16 8\$814.29\$933.87\$67493.45\$1748.16 9\$803.17\$944.99\$66548.46\$1748.16 10\$791.93\$956.23\$65592.23\$1748.16 11\$780.55\$967.61\$64624.61\$1748.16 12\$769.03\$979.13\$63645.49\$1748.16

How much did we pay for Interest? Total Cost = Monthly Payment x 60 = 1748.16 x 60 =\$104889.60 Total Cost – Initial Loan Amount = 104889.60 – 74664.06 = \$30,225.54 (Amount Paid Interest)

5.5% amortized over 4 years Payment # Interest on unpaid bal. \$ Amount paid \$ New bal. \$74644.06 Monthly Pay. \$ 1343.451393.6573270.411737.10 2337.041400.0671870.351737.10 3330.601406.5070463.851737.10 4324.131412.9769050.881737.10 5317.631419.4767631.411737.10 6311.101426.0066205.421737.10 7304.541432.5664772.861737.10 8297.961439.1563333.711737.10 9291.341445.7761887.941737.10 10284.681452.4260435.521737.10 11278.001459.1058976.421737.10 12271.291465.8157510.611737.10

6.0% amortized over 6 years Payment # Interest on unpaid bal. \$ Amount paid \$ New bal. \$74664.06 Monthly Pymnt. \$ 1373.32864.0873799.981237.40 2369.00868.4072931.581237.40 3364.66872.7472058.841237.40 4360.29877.1071181.741237.40 5355.91881.4970300.251237.40 6351.50885.9069414.351237.40 7347.07890.3368524.021237.40 8342.62894.7867629.241237.40 9338.15899.2566729.991237.40 10333.65903.7565826.241237.40 11329.13908.2764917.971237.40 12324.59912.8164005.161237.40

Can we afford this much? 5.5% amortized over 4 years Monthly payment = \$1,737.10 Total Cost = \$83,380.97 Total Interest Paid= \$8,716.91 6.0% amortized over 6 years Monthly payment = \$1,237.40 Total Cost = \$89,092.74 Total Interest Paid=14,428.68

Which Scenario? 1.14.24% amortized over 5 years 2.5.5% amortized over 4 years 3.6.0% amortized over 6 years

5.5% amortized over 4 years Monthly payment = \$1,737.10 Total Cost = \$83,380.97 Total Interest Paid= \$8,716.91 6.0% amortized over 6 years Monthly payment = \$1,237.40 Total Cost = \$89,092.74 Total Interest Paid=\$14,428.68 14.24% amortized over 5 years Monthly payment = \$1,748.16 Total Cost = \$104,889.57 Total Interest Paid = \$30,225.51

5.5% amortized over 4 years! This is better than the others because the amount should be paid per month is \$1737.10 and total cost will be \$29,562.15. Its the best price compared to other scnerios.

!BONUS QUESTION! Cost: \$33,265.0 # of Months Paid so far : 39 # of Months should be paid : 60 Annual interest rate: 6.5%(0.065) Monthly Interest : 0.0054 Monthly payment : \$400

Total Payments made so far = 400 x 39 = \$15,600 Payments Left = 33265.00-15600 = \$17,665.00 Monthly Payment = 17665 (0.0054) \$ 345.47 1-(1+0.0054 )^(-12x5)

6.5% amortized over 5 years Payment # Interest on unpaid balance (\$) Amount paid toward principle (\$) New balance \$17665.00 Monthly Payment (\$) 195.39250.0817414.92345.47 294.04251.4317163.49345.47 392.68252.7916910.70345.47 491.32254.1516656.55345.47 589.95255.5316401.02345.47 688.57256.9116144.12345.47 787.18258.2915885.83345.47 885.78259.6915626.14345.47 984.38261.0915365.05345.47 1082.97262.5015102.55345.47 1181.55263.9214838.64345.47 1280.13265.3414573.29345.47

How Much? Total Cost = 345.47 x 60 = \$20,728.20 How much will be paid for this car? Total Payment + Payments made so far = 20728.20 + 15600.00 = \$36,328.20

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