Consider the following loan: a 60-month, $45,000 car loan with a 12% APR, compounded monthly. Assume that right after you make your 50th payment, the balance on the loan is $9,480.78. How much of your next payment goes toward principal, and how much goes toward interest? Compare this with the principal and interest paid in the first month's payment ($551.00 toward principal and $450.00 toward interest in the first month). What is happening? The amount that goes toward interest is S (Round to the nearest cent.)
Consider the following loan: a 60-month, $45,000 car loan with a 12% APR, compounded monthly. Assume that right after you make your 50th payment, the balance on the loan is $9,480.78. How much of your next payment goes toward principal, and how much goes toward interest? Compare this with the principal and interest paid in the first month's payment ($551.00 toward principal and $450.00 toward interest in the first month). What is happening? The amount that goes toward interest is S (Round to the nearest cent.)
Chapter4: Time Value Of Money
Section4.17: Amortized Loans
Problem 1ST
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Transcribed Image Text:Consider the following loan: a 60-month, $45,000 car loan with a 12% APR, compounded monthly. Assume that right after you make your 50th payment, the balance on the loan is $9,480.78. How much of your next payment goes toward principal, and how
much goes toward interest? Compare this with the principal and interest paid in the first month's payment ($551.00 toward principal and $450.00 toward interest in the first month). What is happening?
The amount that goes toward interest is $
(Round to the nearest cent.)
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