Assume the following: Payment #1 totals $1,600 ($1,200 principal and $400 interest expense); Payment #2 totals $1,600 ($1,300 principal and $300 interest expense); and the remaining principal balance before these two payments is $50,000. If the amortization schedule’s "Remaining Principal Balance" column prior to these payments amounts to $50,000, what is the balance in the column after these payments?

$47,500

Explanation:

GIVEN the following :

PRINCIPAL BALANCE BEFORE PAYMENT= $50,000

Payment 1:

Interest expense = $400

Principal = $1,200

TOTAL = $1,600

Payment 2:

Interest expense = $300

Principal = $1,300

Total = $1600

PRINCIPAL BALANCE PRIOR TO PAYMENT = $50,000

AMORTIZATION SCHEDULE

PAYMENT 1:

PAYMENT : $1600

PRINCIPAL : $1200

INTEREST : $400

PRINCIPAL BALANCE : $48,800

PAYMENT 2:

PAYMENT: $1600

PRINCIPAL: $1300

INTEREST: $300

PRINCIPAL BALANCE: $47,500

i'ts proportional. if the inflation rate is 12% for example, the cpi will be 12% less.

hope it ,

bioteacher101

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