Amortization Schedules

Retail Price: $79,665.00 Tax : 6.25% (0.065)

Initial amount (Borrowed): $10,000Annual Payments: 12

Total Payments: 60Annual interest rate: 14.24%(0.1424)

TOTAL PRICE

Tax = 79,665.00(.0625) = $4979.0625

Cost (Retail + Tax)= 79,665.00 + 4979.0625 = $84644.0625

Cost – Down Payment =Loan Amount=84644.0625 – 10000 = $74,644.0625

Monthly Interest = Annual Interest = 14.24 ≈ 0.0119

12 12

(P.= $74664.06 m.i. = 0.0119 # months = 12 # years = 5 )

74664.06 (0.0119)

Monthly Payment = ≈ $1748.16

1- (1+(0.0119 ))-12x5

MONTHLY INTEREST

Payments #1 & #2

Payment #2

Interest On Unpaid Balance = $73804.41 x 0.0119 = $878.27

Amount Paid Toward Principle = 1748.61 – 878.27 = $869.89

New Balance = 73804.41 – 869.89 = $72934.52

Payment #1

Interest On Unpaid Balance = 74664.0625 x 0.0119 = $888.50

Amount Paid Toward Principle = 1748.61 - 888.50 = $859.66

New Balance = 74664.06 – 859.66 = $73804.41

Amortization Table (12 Months)

Payment #

Interest On Unpaid

Balance

Amount Paid Toward

Principle New Balance$74664.06

Monthly Payment

1 $888.50 $859.66 $73804.41 $1748.16

2 $878.27 $869.89 $72934.52 $1748.16

3 $867.92 $880.24 $72054.28 $1748.16

4 $857.45 $890.71 $71163.57 $1748.16

5 $846.85 $901.31 $70262.25 $1748.16

6 $836.12 $912.04 $69350.21 $1748.16

7 $825.27 $922.89 $68427.32 $1748.16

8 $814.29 $933.87 $67493.45 $1748.16

9 $803.17 $944.99 $66548.46 $1748.16

10 $791.93 $956.23 $65592.23 $1748.16

11 $780.55 $967.61 $64624.61 $1748.16

12 $769.03 $979.13 $63645.49 $1748.16

How much did we pay for Interest?

Total Cost = Monthly Payment x 60

= 1748.16 x 60 =$104889.60

Total Cost – Initial Loan Amount

= 104889.60 – 74664.06

= $30,225.54 (Amount Paid Interest)

5.5% amortized over 4 yearsPayment

#Interest on unpaid bal.

$Amount paid

$New bal.

$74644.06Monthly Pay.

$

1 343.45 1393.65 73270.41 1737.10

2 337.04 1400.06 71870.35 1737.10

3 330.60 1406.50 70463.85 1737.10

4 324.13 1412.97 69050.88 1737.10

5 317.63 1419.47 67631.41 1737.10

6 311.10 1426.00 66205.42 1737.10

7 304.54 1432.56 64772.86 1737.10

8 297.96 1439.15 63333.71 1737.10

9 291.34 1445.77 61887.94 1737.10

10 284.68 1452.42 60435.52 1737.10

11 278.00 1459.10 58976.42 1737.10

12 271.29 1465.81 57510.61 1737.10

6.0% amortized over 6 years

Payment #Interest on unpaid bal.

$Amount paid

$New bal.

$74664.06Monthly Pymnt.

$

1 373.32 864.08 73799.98 1237.40

2 369.00 868.40 72931.58 1237.40

3 364.66 872.74 72058.84 1237.40

4 360.29 877.10 71181.74 1237.40

5 355.91 881.49 70300.25 1237.40

6 351.50 885.90 69414.35 1237.40

7 347.07 890.33 68524.02 1237.40

8 342.62 894.78 67629.24 1237.40

9 338.15 899.25 66729.99 1237.40

10 333.65 903.75 65826.24 1237.40

11 329.13 908.27 64917.97 1237.40

12 324.59 912.81 64005.16 1237.40

Can we afford this much?

5.5% amortized over 4 yearsMonthly payment = $1,737.10Total Cost = $83,380.97Total Interest Paid= $8,716.91

6.0% amortized over 6 yearsMonthly payment = $1,237.40Total Cost = $89,092.74Total Interest Paid=14,428.68

Which Scenario?

1. 14.24% amortized over 5 years

2. 5.5% amortized over 4 years

3. 6.0% amortized over 6 years

5.5% amortized over 4 years

Monthly payment = $1,737.10

Total Cost = $83,380.97

Total Interest Paid= $8,716.91

6.0% amortized over 6 yearsMonthly payment = $1,237.40Total Cost = $89,092.74Total Interest Paid=$14,428.68

14.24% amortized over 5 yearsMonthly payment = $1,748.16Total Cost = $104,889.57Total Interest Paid = $30,225.51

5.5% amortized over 4 years!

This is better than the others because the amount should be paid per month is $1737.10 and total

cost will be $29,562.15. It’s the best price compared to other scnerios.

!BONUS QUESTION!

Cost: $33,265.0

# of Months Paid so far : 39

# of Months should be paid : 60

Annual interest rate: 6.5%(0.065)

Monthly Interest : 0.0054

Monthly payment : $400

Total Payments made so far = 400 x 39 = $15,600

Payments Left = 33265.00-15600 = $17,665.00

Monthly Payment = 17665 (0.0054) ≈ $ 345.47

1-(1+0.0054 )^(-12x5)

6.5% amortized over 5 years

Payment #

Interest on unpaid

balance($)

Amount paid toward

principle ($)

New balance $17665.00

Monthly Payment

($)

1 95.39 250.08 17414.92 345.47

2 94.04 251.43 17163.49 345.47

3 92.68 252.79 16910.70 345.47

4 91.32 254.15 16656.55 345.47

5 89.95 255.53 16401.02 345.47

6 88.57 256.91 16144.12 345.47

7 87.18 258.29 15885.83 345.47

8 85.78 259.69 15626.14 345.47

9 84.38 261.09 15365.05 345.47

10 82.97 262.50 15102.55 345.47

11 81.55 263.92 14838.64 345.47

12 80.13 265.34 14573.29 345.47

How Much?

Total Cost = 345.47 x 60 = $20,728.20

How much will be paid for this car?

Total Payment + Payments made so far = 20728.20 + 15600.00

= $36,328.20