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 $305,600.00
2 $
3 $

Answer 1

To calculate the principal for the following years, we start with the principal at Year 0 and apply the 4.5% decrease each year.

Year 1: Principal at Year 0: $320,000.00 Decrease: \[ 320,000 \times 0.045 = 14,400 \] Principal at Year 1: \[ 320,000 - 14,400 = 305,600.00 \]

Year 2: Principal at Year 1: $305,600.00 Decrease: \[ 305,600 \times 0.045 = 13,752 \] Principal at Year 2: \[ 305,600 - 13,752 = 291,848.00 \]

Year 3: Principal at Year 2: $291,848.00 Decrease: \[ 291,848 \times 0.045 = 13,136.16 \] Principal at Year 3: \[ 291,848 - 13,136.16 = 278,711.84 \]

Now we can fill in the table:

| Year | Principal | |------|------------------| | 0 | $320,000.00 | | 1 | $305,600.00 | | 2 | $291,848.00 | | 3 | $278,711.84 |

So the completed table is:

| Year | Principal | |------|------------------| | 0 | $320,000.00 | | 1 | $305,600.00 | | 2 | $291,848.00 | | 3 | $278,711.84 |