I am struggling with the last part (c) the following question:
Company A borrowed $80,000 for new equipment at 8% per year compounded quarterly. It is to be paid back over 3 years in equal quarterly payments. Calculate a) HOw much interest is in the sixth payment? b) How much principal is in the sixth payment? and c) What principal is owed immediately following the sixth payment?
I determined that the interest and principal on the 6th payment are $979.18 and $6,585.59. However, I am completely stumped on how to determine a principal payment immediately after the 6th payment is paid and no interest accrued. I have tried using the PPMT in excel and long hand calculations using interest tables, but I am getting numbers that I know are not correct. Can someone help me please?
Company A borrowed $80,000 for new equipment at 8% per year compounded quarterly. It is to be paid back over 3 years in equal quarterly payments. Calculate a) HOw much interest is in the sixth payment? b) How much principal is in the sixth payment? and c) What principal is owed immediately following the sixth payment?
I determined that the interest and principal on the 6th payment are $979.18 and $6,585.59. However, I am completely stumped on how to determine a principal payment immediately after the 6th payment is paid and no interest accrued. I have tried using the PPMT in excel and long hand calculations using interest tables, but I am getting numbers that I know are not correct. Can someone help me please?