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| Topic: |
Business
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| Number of pages / Number of words: |
5 / 1216 |
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The table (See Amortization Table 1) in the text demonstrates how part of the loan payment is applied towards the principle and rest goes towards reducing the principle amount (Block, Hirt, 2005).
The main learning of the amortization table is that the owner will pay slightly more in interest costs (41,000) as he did for the loan of 40,000...
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So the car that was priced at 40,000 actually ended up costing the owner 81,000. The amount paid is compounded if the owner takes into consideration the money that could have been earned if part of those funds had been invested. At a return rate of 8%, if the buyer had purchased a less expense car at 30,000 and invested 500 per year over 20 years, he would have 22,881 out of his total investment of 10,000...
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