Concept explainers
Loan Table in Excel. Consider the loan in Exercise (a $7500 loan with an APR of 9% and a payback period of 10 years).
a. Follow the guidelines in the Using Technology) box on p. 241 to construct a table showing the interest payment and loan balance after each month. Verify that, with monthly payments of $95.01, the loan balance reaches $0 after 120 months.
b. How much interest is paid in the first month of the loan? How much is paid toward the principal in the first month of the loan?
c. How much interest is paid in the last month of the loan? How much is paid toward the principal in the last month of the loan?
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