SOLUTION: A client applied for a loan to buy a new machine. The bank approved the amount of 1000000 dollar to be paid within 4 months. The interest rate is 2% per month. The loan (principal)

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Question 1193461: A client applied for a loan to buy a new machine. The bank approved the amount of 1000000 dollar to be paid within 4 months. The interest rate is 2% per month. The loan (principal) will be repaid in equal parts each month. The interest is calculated on the part of the loan which is not repaid yet (outstanding balance) and is paid every month. Calculate the total payment to be made at the end of the first month, second month, third month and fourth month
Answer by Theo(13342) (Show Source):
You can put this solution on YOUR website!
i'm not sure what you're asking.
consequently i gave you two analyses.
the first is equal payments at the end of each month.
the payments include interest and principal in descending and ascending portions.
the interest is highest at the start of the loan and lowest at the end of the loan.
the principal is lowest at the start of the loan and highest at the end of the loan.
the total payments are equal at the end of each month.
the second is equal payment of principal at the end of each month.
the payments are not equal.
they are higher at the beginning of the loan and lower at the end of the loan.
her's what the month by month transactions look like.

let me know if you have any quetions.
theo