Jamie and Eddie are buying an apartment for $320,000. Their loan officer tells them that their principal will decrease by 4.5% every year if they make the minimum mortgage payments. Complete the table to predict the principal for the first 3 years. (Round to the nearest hundredth, if applicable.)(2 points)

Question

Year Principal
0 $320,000.00
1 ___$
2 ___$
3 ___$

Answer 1

To calculate the principal for Jamie and Eddie's mortgage for the first three years, we'll decrease the principal by 4.5% each year.

1. Year 0: The initial principal is $320,000.00.

2. Year 1:

   • Decrease: \( 320,000 \times 0.045 = 14,400 \)
   • New Principal: \( 320,000 - 14,400 = 305,600 \)

3. Year 2:

   • Decrease: \( 305,600 \times 0.045 = 13,752 \)
   • New Principal: \( 305,600 - 13,752 = 291,848 \)

4. Year 3:

   • Decrease: \( 291,848 \times 0.045 = 13,132.16 \)
   • New Principal: \( 291,848 - 13,132.16 = 278,715.84 \)

Now, we can fill in the table:

| Year | Principal | |------|------------------| | 0 | $320,000.00 | | 1 | $305,600.00 | | 2 | $291,848.00 | | 3 | $278,715.84 |

So, the completed table would look like this:

| Year | Principal | |------|------------------| | 0 | $320,000.00 | | 1 | $305,600.00 | | 2 | $291,848.00 | | 3 | $278,715.84 |