A loan is being repaid with quarterly installments of 1000 a

A loan is being repaid with quarterly installments of $1,000 at the end of each quarter for 5 years at 12% convertible quarterly. Find the amount of principal in the sixth installment.

N = 20, FV = 0, rate = 12%/4 = 3%, PMT = 1000

use PV function in Excel

value of loan = 14,877.4749

now put N = 5 and calculate FV

value of loan after the 5th installment = 11,937.9351

amount of principal = 1000 - 3% of 11,937.9351 = 641.86

A loan is being repaid with quarterly installments of $1,000 at the end of each quarter for 5 years at 12% convertible quarterly. Find the amount of principal i

A loan is being repaid with quarterly installments of 1000 a

Solution

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