Question

You purchase a new car for $33,333. What is the outstanding balance on the loan after you make the second payment if you have a 5-year loan with monthly payments and an interest rate of 7.84% (compounded monthly)? (Round your answer to the nearest integer)

Answer 1

$32,419

Step-by-step explanation:

I prepared an amortization schedule using an excel spreadsheet. The monthly payment is $673.32:

year beginning scheduled principal interest ending

balance payment balance

1 $33,333 $673.32 $456 $218 $32,877 .45

2 $32,877 $673.32 $459 $215 $32,418.91

The outstanding balance after the second payment = $32,418.91 ≈ $32,419