amortize a $20,000 loan to buy a car, 4 Let’s years at 10% interest, K=20,000/a 0.10 4 =6,309.42 Time t Principal Interest portion Principal payment outstanding at of K portion of t t+ K 0 -20,000 20,000 0 0 1 6,309.42 =0.10*20,000 =2,000 =15690.58 =4309.42 (Ka3 =6309.42 *2.4869 =15690.58) 2 6,309.42 =0.10*15690.58 =1,569.06 =10950.22 =4740.36 3 6,309.42 0.10*10950.22 +1,095.02 =5735.82 =5214.40 4 6,309.42 0.10*5735.82 =573.58 =0 =5735.82
Let’s amortize a $20,000 loan to buy a car, 4 years at 10% interest, K=20,000/a 0.10 4 =6,309.42 t Time t payment Principal outstanding at t+ Interest portion of K Principal portion of K 0 -20,000 20,000 0 0 1 6,309.42 =15690.58 (Ka3 =6309.42 *2.4869 =15690.58) =0.10*20,000 =2,000 =4309.42 2 6,309.42 =10950.22 =0.10*15690.58 =1,569.06 =4740.36 3 6,309.42 =5735.82 0.10*10950.22 +1,095.02 =5214.40 4 6,309.42 =0 0.10*5735.82 =573.58 =5735.82
381%20Principal%20payoff%20per%20period%20v03.docx