Janet just graduated from college, has a job she’s scheduled to begin in 3 months, and has decided to treat herself

ze:12.0pt;line-height:115%;font-family:”Times New Roman”,serif; mso-fareast-font-family:”Times New Roman”;color:black;mso-themecolor:text1'>Accounting – Others:

 

 

Janet just graduated from college, has a job she’s scheduled to begin in 3 months, and has decided to treat herself to 6 weeks of travel across South America before she buckles down and starts working full-time. To do the trip, she’s thinking of applying for a personal loan of $3500, and the bank she uses for her checking and savings account has offered her an interest rate of 24%. Part I: Amortization Basics Answer the following questions using the INITIAL LOAN AMORTIZATION SCHEDULE. 1. How much is Janet going to pay every month? 2. On Jan 2021, how much of Janet’s payment goes toward: a. interest? b. principal? 3. Look at Janet’s repayment on Feb 2021. a. How do the interest and principal compare to what she paid in the previous month? 4. By the time Janet pays off her entire loan, a. how much interest will she have paid? b. how much will the trip have cost her in total? (To calculate, Principal + Total Interest) 5. Let’s suppose Janet received a year-end bonus and can afford to pay $285.05 during January 2022. a. Rewrite the line of the amortization schedule for 1/1/2022 using her new payment (Use LOAN AMORTIZATION W/ ONE-TIME $100 EXTRA) DATE PAYMENT PRINCIPAL INTEREST TOTAL INTEREST BALANCE 1/1/2022 $285.05

 


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