Amortization Schedules Retail Price: $79, 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) = $ Cost (Retail + Tax) = 79, = $ Cost – Down Payment =Loan Amount = – = $74,

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

Payments #1 & #2 Payment #2 Interest On Unpaid Balance = $ x = $ Amount Paid Toward Principle = – = $ New Balance = – = $ Payment #1 Interest On Unpaid Balance = x = $ Amount Paid Toward Principle = = $ New Balance = – = $

Amortization Table (12 Months) Payment # Interest On Unpaid Balance Amount Paid Toward PrincipleNew Balance $ Monthly Payment 1$888.50$859.66$ $ $878.27$869.89$ $ $867.92$880.24$ $ $857.45$890.71$ $ $846.85$901.31$ $ $836.12$912.04$ $ $825.27$922.89$ $ $814.29$933.87$ $ $803.17$944.99$ $ $791.93$956.23$ $ $780.55$967.61$ $ $769.03$979.13$ $

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

5.5% amortized over 4 years Payment # Interest on unpaid bal. $ Amount paid $ New bal. $ Monthly Pay. $

6.0% amortized over 6 years Payment # Interest on unpaid bal. $ Amount paid $ New bal. $ Monthly Pymnt. $

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

Which Scenario? % 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, Total Cost = $83, Total Interest Paid= $8, % amortized over 6 years Monthly payment = $1, Total Cost = $89, Total Interest Paid=$14, % amortized over 5 years Monthly payment = $1, Total Cost = $104, 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 $ and total cost will be $29, 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 : Monthly payment : $400

Total Payments made so far = 400 x 39 = $15,600 Payments Left = = $17, Monthly Payment = (0.0054) $ ( )^(-12x5)

6.5% amortized over 5 years Payment # Interest on unpaid balance ($) Amount paid toward principle ($) New balance $ Monthly Payment ($)

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