Answer:
find answers below
Explanation:
First and foremost, we need to determine the payment on a monthly basis in order to proceed further as shown thus:
PV(loan amount)=monthly payment*(1-(1+r)^-n/r
loan amount=$50,000
the monthly payment is the unknown
r=monthly interest rate=6%/12=0.5%
n=number of monthly payments in 5 years=5*12=60
50,000=monthly payment*(1-(1+0.5%)^-60/0.5%
50,000=monthly payment*(1-(1.005
)^-60/0.005
50,000=monthly payment*(1-0.74137220
)/0.005
50,000=monthly payment*0.25862780
/0.005
monthly payment=50,000*0.005/0.25862780
=$966.64
first month:
amount paid $966.64
interest=0.5 %*$50,000=$250
principal paid=monthly payment-interest=$966.64-$250=$716.64
loan balance=$50,000-$716.64=$49,283.36
second month:
amount paid $966.64
interest =0.5%*$49,283.36=$246.42
principal paid=$966.64-$246.42 =$720.22
