Suki has a plan to pay off her business loan of ₱955. Her annual interest rate is 4.1%. Her payments are ₱24.45 per month. Complete the amortization table and find the ending balance for month 1. Round your answer to two decimal places.Month Beginning Balance Payment: To Interest Payment: To Principal Ending Balance1 ??2 3
Question
Suki has a plan to pay off her business loan of ₱955. Her annual interest rate is 4.1%. Her payments are ₱24.45 per month. Complete the amortization table and find the ending balance for month 1. Round your answer to two decimal places.Month Beginning Balance Payment: To Interest Payment: To Principal Ending Balance1 ??2 3
Solution 1
To find the ending balance for month 1, we need to follow these steps:
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Calculate the monthly interest rate: The annual interest rate is 4.1%, so the monthly interest rate is 4.1% / 12 = 0.34167%.
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Calculate the interest for the first month: The beginning balance is ₱955, so the interest for the first month is ₱955 * 0.34167% = ₱3.26.
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Calculate the payment to the principal: The total payment per month is ₱24.45, so the payment to the principal is ₱24.45 - ₱3.26 = ₱21.19.
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Calculate the ending balance: The beginning balance is ₱955, so the ending balance is ₱955 - ₱21.19 = ₱933.81.
So, the ending balance for month 1 is ₱933.81.
Here is the completed amortization table for the first month:
Month Beginning Balance Payment: To Interest Payment: To Principal Ending Balance 1 ₱955 ₱3.26 ₱21.19 ₱933.81
Solution 2
To find the ending balance for month 1, we need to follow these steps:
-
Calculate the monthly interest rate: The annual interest rate is 4.1%, so the monthly interest rate is 4.1% / 12 = 0.34167%.
-
Calculate the interest for the first month: The beginning balance is ₱955, so the interest for the first month is ₱955 * 0.34167% = ₱3.26.
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Calculate the principal payment for the first month: The total payment is ₱24.45, so the principal payment is ₱24.45 - ₱3.26 = ₱21.19.
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Calculate the ending balance for the first month: The beginning balance is ₱955, so the ending balance is ₱955 - ₱21.19 = ₱933.81.
So, the ending balance for month 1 is ₱933.81.
Here is the completed amortization table for the first month:
Month Beginning Balance Payment: To Interest Payment: To Principal Ending Balance 1 ₱955 ₱3.26 ₱21.19 ₱933.81
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