Part I-A

Truck Price
Percent Down
APR
Pmt/Yr
Yr

$40,000.00
15.00%
1.00%
12
2

Amount Down
Amount Loan
Monthly Deposit

$6,000.00
$34,000.00
$247.61

Saving Schedule

PMT #
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24

1.
2.
3.
4.

$ PMT

$ INT

$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61
$247.61

$0.00
$0.21
$0.41
$0.62
$0.83
$1.03
$1.24
$1.45
$1.66
$1.86
$2.07
$2.28
$2.49
$2.70
$2.90
$3.11
$3.32
$3.53
$3.74
$3.95
$4.16
$4.37
$4.58
$4.79

$5,942.70

$57.30

$ BAL
$247.61
$495.43
$743.46
$991.69
$1,240.13
$1,488.77
$1,737.63
$1,986.69
$2,235.96
$2,485.43
$2,735.11
$2,985.01
$3,235.11
$3,485.41
$3,735.93
$3,986.66
$4,237.59
$4,488.74
$4,740.09
$4,991.65
$5,243.42
$5,495.41
$5,747.60
$6,000.00

$5942.70
$57.30
.9642%
The percentage of
interest earned is less
than the APR.

Part I-B
House Price
Percent Down
APR
pmt/yr
yr

$250,000.00
20.00%
1.50%
12
3

Amount Down
Amount Loan
Monthly Deposit

$50,000.00
$200,000.00
$1,358.74

Saving Schedule

PMT #

$ PMT
1
12
24
36

$1,358.74
$1,358.74
$1,358.74
$1,358.74

$ INT

$ BAL

$0.00 $1,358.74
$18.80 $16,417.46
$39.61 $33,082.87
$60.73 $50,000.00

$48,914.68 $1,085.32

1.
2.
3.
4.
5.

$48914.68
$1085.32
2.2188%
The percentage of interest earned is greater than the APR.
The interest earned in I-B is much greater than the interest earned in I-A because the APR for
the house savings is higher and the account has more deposit periods, giving the funds more
time to earn compound interest.

Part II-A
Loan Amount

$34,000.00
APR
2.25%
Pmt/Yr
12
Yr
5

Monthly Payment

$599.67

Payment Schedule

PMT #
1
12
24
36
48
60

1.
2.
3.
4.

$34,000.00
$1,980.18
$35,980.18
5.8241%

$ PMT

$ INT PD

$ PRINC PD

$63.75
$52.59
$40.16
$27.44
$14.43
$1.12

$535.92
$547.08
$559.51
$572.23
$585.24
$598.55

$35,980.18 $1,980.18

$34,000.00

$599.67
$599.67
$599.67
$599.67
$599.67
$599.67

$ BAL
$34,000.00
$33,464.08
$27,502.23
$20,856.74
$14,060.17
$7,109.10
$0.00

Part II-B
Loan Amount

$200,000.00
APR
3.75%
Pmt/Yr
12
Yr
30

Monthly Payment
Payment Schedule

$926.23
PMT #
1
12
60
120
240
360

$ PMT
$926.23
$926.23
$926.23
$926.23
$926.23
$926.23

$ INT PD
$625.00
$614.48
$564.11
$489.56
$291.25
$2.89

$ PRINC PD
$301.23
$311.75
$362.12
$436.67
$634.98
$923.35

$ BAL
$200,000.00
$199,698.77
$196,322.45
$180,154.63
$156,223.55
$92,566.43
$0.00

$333,443.23 $133,443.23 $200,000.00

1.
2.
3.
4.
5.

$200,000
$133,443.23
$333,443.23
66.7216%
Similar to the savings schedules, the length of the loan, amount of principal, and a higher APR
significantly impact the percentage of interest accrued. Given that the home loan was for six
times the length, interest had the opportunity to compound a great deal more.

Part III
The homework problem addressing two individuals retirement savings was fairly
understandable, but I really enjoyed this assignment. Having the schedule broken out and seeing the
small changes over time clarified how it gets from initial numbers to final numbers. When the principal
is increasing, the potential to earn more interest grows with the number of payments per year and years
payments are made because of compounding interest. When the principal is decreasing, the more
payments made for a shorter amount of time will decrease accrued interest. This is most impactful in

the early payments. This assignment has initiated a lot of thought and understanding about my own
retirement fund and recent car loan.