Answer:
Carrying value of the principal at the 60th payment: 46,692.98266
Explanation:
First, we need to solve for the present value of the annuity with an arithmetic progression
[tex]c \times a_{n:i} + \frac{h}{i} a_{n:i} - n(1+i)^{-n}[/tex]
c= 320
h= 5
i= 4% / 12 months per year = 0.003333333
n= (950-320)/5 + 1 = 127
we determinate the time of the loan considering each quota increase by 5 dollars and there is a first quota of 320
PV = $63,355.72
Now, we build the amortization schedule and look for the value at the 60th payment:
Period Principal Interest Quota Amortization Carrying
1 63,355.72 211.185746 320 108.814254 63246.90954
2 63246.90954 210.8230318 325 114.1769682 63132.73257
3 63132.73257 210.4424419 330 119.5575581 63013.17501
....
58 48046.98288 160.1566096 605 444.8433904 47602.13949
59 47602.13949 158.6737983 610 451.3262017 47150.81328
60 47150.81328 157.1693776 615 457.8306224 46692.98266
