Week 5 Project

Running head: AMORTIZATION 1

Evaluate a car payment and mortgage payment

Sandra Villarreal

South University Online

FIN2030 Fundamental of Financial Management SU01

Dr. J Flores

April 6, 202

The scenario is designed to help you determine and evaluate the payment amount of a car loan and a mortgage, based on the assumption that your household income is $36,000 per year or $3,000 per month. Based on your income, you may spend 28% of your monthly income on housing, and 10% on a car loan. You are to put a 3% down payment on the house and a 10% down payment on the car.

· What is the maximum car payment and mortgage payment you can afford with the following conditions: your monthly household income, 10% for the car payment over 4 years, and 28% for the 15-year mortgage payments? Base on the information provided the maximum car payment is $300.00 per month. The maximum mortgage payment is $840.00 per month.

· Create a complete amortization schedule for the car, using the information above.

Please see my amortization schedule for the car below.

· Analyze the distributions of principal, interest, and the balance over the life of the loan.

The loan principle is the amount that was borrowed. It is separated into two principal and interest. As the borrow pays the lender a portion of the payment is applied to the interest that has incurred and the remaining amount is applied to the principle. There are loans that can have additional charges, such as insurance or taxes. On this loan, there are no additional charges other than the interest that has been incurred. This is relatively done until the loan is paid completely.

References:

Brigham, E. Fundamentals of Financial Management, Concise Edition. (South University) Retrieved from

https://digitalbookshelf.southuniversity.edu/#/books/9781305887213

Enter ValuesLoan Summary

$12,528.00

7.00%

4

12

4/1/2021

$0.00

Payment

Number

Payment

Date

Beginning

Balance

Scheduled

Payment

Extra

Payment

Total

Payment

PrincipalInterest

Ending

Balance

Cumulative

Interest

14/1/2021$12,528.00$300.00$0.00$300.00$226.92$73.08$12,301.08$73.08

25/1/2021$12,301.08$300.00$0.00$300.00$228.24$71.76$12,072.84$144.84

36/1/2021$12,072.84$300.00$0.00$300.00$229.57$70.42$11,843.27$215.26

47/1/2021$11,843.27$300.00$0.00$300.00$230.91$69.09$11,612.35$284.35

58/1/2021$11,612.35$300.00$0.00$300.00$232.26$67.74$11,380.09$352.09

69/1/2021$11,380.09$300.00$0.00$300.00$233.61$66.38$11,146.48$418.47

710/1/2021$11,146.48$300.00$0.00$300.00$234.98$65.02$10,911.50$483.49

811/1/2021$10,911.50$300.00$0.00$300.00$236.35$63.65$10,675.15$547.14

912/1/2021$10,675.15$300.00$0.00$300.00$237.73$62.27$10,437.43$609.41

101/1/2022$10,437.43$300.00$0.00$300.00$239.11$60.88$10,198.31$670.30

112/1/2022$10,198.31$300.00$0.00$300.00$240.51$59.49$9,957.80$729.79

123/1/2022$9,957.80$300.00$0.00$300.00$241.91$58.09$9,715.89$787.88

134/1/2022$9,715.89$300.00$0.00$300.00$243.32$56.68$9,472.57$844.55

145/1/2022$9,472.57$300.00$0.00$300.00$244.74$55.26$9,227.83$899.81

156/1/2022$9,227.83$300.00$0.00$300.00$246.17$53.83$8,981.66$953.64

167/1/2022$8,981.66$300.00$0.00$300.00$247.61$52.39$8,734.05$1,006.03

178/1/2022$8,734.05$300.00$0.00$300.00$249.05$50.95$8,485.00$1,056.98

189/1/2022$8,485.00$300.00$0.00$300.00$250.50$49.50$8,234.50$1,106.47

1910/1/2022$8,234.50$300.00$0.00$300.00$251.96$48.03$7,982.54$1,154.51

2011/1/2022$7,982.54$300.00$0.00$300.00$253.43$46.56$7,729.10$1,201.07

2112/1/2022$7,729.10$300.00$0.00$300.00$254.91$45.09$7,474.19$1,246.16

221/1/2023$7,474.19$300.00$0.00$300.00$256.40$43.60$7,217.79$1,289.76

232/1/2023$7,217.79$300.00$0.00$300.00$257.89$42.10$6,959.90$1,331.86

243/1/2023$6,959.90$300.00$0.00$300.00$259.40$40.60$6,700.50$1,372.46

254/1/2023$6,700.50$300.00$0.00$300.00$260.91$39.09$6,439.59$1,411.55

265/1/2023$6,439.59$300.00$0.00$300.00$262.43$37.56$6,177.15$1,449.11

276/1/2023$6,177.15$300.00$0.00$300.00$263.97$36.03$5,913.19$1,485.15

287/1/2023$5,913.19$300.00$0.00$300.00$265.50$34.49$5,647.68$1,519.64

298/1/2023$5,647.68$300.00$0.00$300.00$267.05$32.94$5,380.63$1,552.58

309/1/2023$5,380.63$300.00$0.00$300.00$268.61$31.39$5,112.02$1,583.97

3110/1/2023$5,112.02$300.00$0.00$300.00$270.18$29.82$4,841.84$1,613.79

3211/1/2023$4,841.84$300.00$0.00$300.00$271.75$28.24$4,570.08$1,642.04

3312/1/2023$4,570.08$300.00$0.00$300.00$273.34$26.66$4,296.74$1,668.69

341/1/2024$4,296.74$300.00$0.00$300.00$274.93$25.06$4,021.81$1,693.76

352/1/2024$4,021.81$300.00$0.00$300.00$276.54$23.46$3,745.27$1,717.22

363/1/2024$3,745.27$300.00$0.00$300.00$278.15$21.85$3,467.12$1,739.07

374/1/2024$3,467.12$300.00$0.00$300.00$279.77$20.22$3,187.35$1,759.29

385/1/2024$3,187.35$300.00$0.00$300.00$281.41$18.59$2,905.94$1,777.88

396/1/2024$2,905.94$300.00$0.00$300.00$283.05$16.95$2,622.89$1,794.84

407/1/2024$2,622.89$300.00$0.00$300.00$284.70$15.30$2,338.19$1,810.14

418/1/2024$2,338.19$300.00$0.00$300.00$286.36$13.64$2,051.84$1,823.78

429/1/2024$2,051.84$300.00$0.00$300.00$288.03$11.97$1,763.81$1,835.74

4310/1/2024$1,763.81$300.00$0.00$300.00$289.71$10.29$1,474.10$1,846.03

4411/1/2024$1,474.10$300.00$0.00$300.00$291.40$8.60$1,182.70$1,854.63

4512/1/2024$1,182.70$300.00$0.00$300.00$293.10$6.90$889.60$1,861.53

461/1/2025$889.60$300.00$0.00$300.00$294.81$5.19$594.79$1,866.72

472/1/2025

$594.79$300.00$0.00$300.00$296.53$3.47$298.26

$1,870.19

483/1/2025

$298.26$300.00$0.00$298.26$296.52$1.74$0.00

$1,871.93

Scheduled payment$300.00

Scheduled number of payments48

Loan Amortization Schedule

Loan amount

Annual interest rate

Loan period in yearsActual number of payments48

Total early payments$0.00Number of payments per year

Start date of loan

Optional extra payments

Total interest$1,871.93

Lender name

Woodgrove Bank