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.)

Question

Year | Principle
0 | $320,000.00
1 | ?
2 | ?
3 | ?

Answer 1

To calculate the principal for each year based on a 4.5% decrease, you can use the formula:

\[ \text{New Principal} = \text{Current Principal} \times (1 - \text{Decrease Rate}) \]

Where the decrease rate is 4.5% or 0.045. Let's proceed with the calculations.

For Year 1: \[ \text{Principal for Year 1} = 320,000 \times (1 - 0.045) = 320,000 \times 0.955 = 305,600.00 \]

For Year 2: \[ \text{Principal for Year 2} = 305,600 \times (1 - 0.045) = 305,600 \times 0.955 = 291,696.00 \]

For Year 3: \[ \text{Principal for Year 3} = 291,696 \times (1 - 0.045) = 291,696 \times 0.955 = 278,158.32 \]

Now, let's put this in table form:

| Year | Principal | |------|-----------------| | 0 | $320,000.00 | | 1 | $305,600.00 | | 2 | $291,696.00 | | 3 | $278,158.32 |

Remember to round as needed. For Year 3, if rounding to the nearest hundredth, it remains $278,158.32.