Question

Melanie wants to purchase a car that costs $43, 150. She has decided to make a 20% down payment. Her bank offers her a 48-month loan at a 5.25% interest rate. Build a loan amortization schedule. What is the amount of interest paid on the car loan for the first 12 months?​

Answer 1

The amount of interest paid on the car loan for the first 12 months would be $ 453,075.

Given that Melanie wants to purchase a car that costs $ 43,150, and she has decided to make a 20% down payment, and her bank offers her a 48-month loan at a 5.25% interest rate, to determine what is the amount of interest paid on the car loan for the first 12 months the following calculation must be performed:

• (43,150 x (1 - 0.20)) x 0.0525 = X
• 43,150 x 0.8 x 0.0525 = X
• 34,520 x 0.0525 = X
• 1,812.3 = X
• 1,812.3 / 48 x 12 = X
• 37.75625 x 12 = X
• 453.075 = X

Therefore, the amount of interest paid on the car loan for the first 12 months would be $453,075.

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