Car Loan with Amortization

When purchasing a new car, the auto dealer has offered a 12.5% interest rate over 36 months on a $7,500 loan. What will be the monthly payment?

Variable	Enter
Clear
Pmt Timing	End
Present Val	7,500
Future Val	0
Intrst/Yr%	12.5
Periods	36
Periods/Yr	12
Cmpnds/Yr	12

Compute Payment by scrolling to its variable and choosing Calculate from the menu.

The payment will be –250.90 per month. It is negative because it is a cash outflow.

---

How much interest was paid for the first payment? (Assumes you are currently in the TVM template.)

• Select menu or select the clickwheel.
• Choose Amortization from the menu.

The first year calculates automatically.

Interest for the first period is –78.13. This is negative because it is part of the payment, which is a cash outflow.

---

How much principal was paid for the first year if the car was purchased in January? (Assumes you are currently in the TVM template.)

• Select menu or select the clickwheel.
• Choose Amortization from the menu.
• Enter 1 for Beg Period.
• Enter 12 for End Period.

The range calculates when you enter the End Period.

The principal paid for the first year is –2196.29. This value is negative because it is part of the payment, which is a cash outflow.