Reference no: EM132832357

A $60,000 loan with an annual interest rate of 10% is scheduled to be paid over three years (36 months). A=P r(1+r)n (1+r)n-1

A= Payment per period

P= initial principal (loan amount)

r= interest rate per period

n= total number of payments or periods

Problem 1: What is the monthly interest rate (in percent up to 4 decimal places, a.k.a. the ten-thousandths place, and do not round up)?

Problem 2: How much interest expense (report to the nearest full dollar in dollars AND cents) will incur in the first month with the loan balance at $60,000?

Problem 3: Use the formula from the lecture (below) to determine the monthly payment (in dollars and cents). Remember that to use a % in a calculation you need to move the decimal sign left two places.

Problem 4: How much (in dollars and cents) of this first monthly payment went to principal?

Problem 5: What is the remaining loan balance (in dollars and cents) after the first payment?