dream car
DESCRIPTION
DREAM CAR. 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) - PowerPoint PPT PresentationTRANSCRIPT
Amortization Schedules
Retail Price: $79,665.00 Tax : 6.25% (0.065)
Initial amount (Borrowed): $10,000Annual Payments: 12
Total Payments: 60Annual 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
Principle New 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 yearsPayment
#Interest on unpaid bal.
$Amount paid
$New bal.
$74644.06Monthly Pay.
$
1 343.45 1393.65 73270.41 1737.10
2 337.04 1400.06 71870.35 1737.10
3 330.60 1406.50 70463.85 1737.10
4 324.13 1412.97 69050.88 1737.10
5 317.63 1419.47 67631.41 1737.10
6 311.10 1426.00 66205.42 1737.10
7 304.54 1432.56 64772.86 1737.10
8 297.96 1439.15 63333.71 1737.10
9 291.34 1445.77 61887.94 1737.10
10 284.68 1452.42 60435.52 1737.10
11 278.00 1459.10 58976.42 1737.10
12 271.29 1465.81 57510.61 1737.10
6.0% amortized over 6 years
Payment #Interest on unpaid bal.
$Amount paid
$New bal.
$74664.06Monthly Pymnt.
$
1 373.32 864.08 73799.98 1237.40
2 369.00 868.40 72931.58 1237.40
3 364.66 872.74 72058.84 1237.40
4 360.29 877.10 71181.74 1237.40
5 355.91 881.49 70300.25 1237.40
6 351.50 885.90 69414.35 1237.40
7 347.07 890.33 68524.02 1237.40
8 342.62 894.78 67629.24 1237.40
9 338.15 899.25 66729.99 1237.40
10 333.65 903.75 65826.24 1237.40
11 329.13 908.27 64917.97 1237.40
12 324.59 912.81 64005.16 1237.40
Can we afford this much?
5.5% amortized over 4 yearsMonthly payment = $1,737.10Total Cost = $83,380.97Total Interest Paid= $8,716.91
6.0% amortized over 6 yearsMonthly payment = $1,237.40Total Cost = $89,092.74Total 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 yearsMonthly payment = $1,237.40Total Cost = $89,092.74Total Interest Paid=$14,428.68
14.24% amortized over 5 yearsMonthly payment = $1,748.16Total Cost = $104,889.57Total 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. It’s 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 $17665.00
Monthly Payment
($)
1 95.39 250.08 17414.92 345.47
2 94.04 251.43 17163.49 345.47
3 92.68 252.79 16910.70 345.47
4 91.32 254.15 16656.55 345.47
5 89.95 255.53 16401.02 345.47
6 88.57 256.91 16144.12 345.47
7 87.18 258.29 15885.83 345.47
8 85.78 259.69 15626.14 345.47
9 84.38 261.09 15365.05 345.47
10 82.97 262.50 15102.55 345.47
11 81.55 263.92 14838.64 345.47
12 80.13 265.34 14573.29 345.47
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