Answered: Michael is to mortise a $65,000 car…

Michael is to mortise a $65,000 car loan by making equal payments at the end of each month for 5 years. If interest is at 6.24% compounded monthly, find: the principal remaining after 2 years.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 5Q: If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the...

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

Michael is to mortise a $65,000 car loan by making equal payments at the end of each month for 5 years. If interest is at 6.24% compounded monthly, find:

the principal remaining after 2 years.

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