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Bob Katz is purchasing a new Honda Pilot for $34,000. He is financing $30,000 with a six year, 4% loan with annual payments. Construct an amortization schedule, in the 2nd year row, corresponding to his second annual payment, what is the dollar amount of the principal reduction

Respuesta :

Answer:

$ 4,704  

Explanation:

The starting point would be to ascertain the yearly payment using the excel pmt function as below:

=pmt(rate,nper,-pv,fv)

rate is the interest rate on the loa which is 4%

nper is the number of annual payments i.e 6

pv is the amount of finance granted which is $30000

fv is the balance after payments have been  i.e $0

=pmt(4%,6,-30000,0)=$5,722.86  

Find attached amortization schedule

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