BUSN 5200 F2 2022: What is the amount of interest and repayment of principal balance in month 2 for a loan of $10,000, paid monthly over five years at a 7 percent APR?
Posted: December 23rd, 2022
What is the amount of interest and repayment of principal balance in month 2 for a loan of $10,000, paid monthly over five years at a 7 percent APR?
Interest = $57.52; Principal repayment = $140.49
Step 1: PV = 10000; N = 60; I = 7/12; FV = 0; => PMT = 198.01 Step 2: N = 1; PV = 10000; PMT = -198.01; I = 7/12; => FV = 9860.32 Step 3: Int = 9860.32 × 0.07/12 = 57.52 Step 4: 198.01 – 57.52 = Repayment = 140.49
Interest = $157.52; Principal repayment = $40.49
Interest = $107.52; Principal repayment = $40.49
Interest = $101.32; Principal repayment = $57.51
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