Question

Camp Elim obtains a $125,000, 6%, five-year loan for a new camp bus on January 1, 2021. If the monthly payment is $2,416.60, by how much will the carrying value decrease when the first payment is made on January 31, 2021?

Answer 1

Answer:

The loan amount is = $125000

Rate is = 6%

Term of the loan = 5 years or 60 months

EMI is = $2416.60

Now I have solved this using reducing method ans excel sheet. Please find attached the sheet.

So we can see that after 1st payment, the principle is left to $ 123,208.40  

The value decreases by : $125000-123208.40=1791.60$

Download xlsx