You currently have a one-year-old loan outstanding on your car. you make monthly payments of $ 400$400. you have just made a payment. the loan has four years to go (i. e., it had an original term of five years). show the timeline from your perspective. how would the timeline differ if you created it from the bank's perspective?

Question

Aniya Bass

Business

2 February, 02:36

You currently have a one-year-old loan outstanding on your car. you make monthly payments of $ 400$400. you have just made a payment. the loan has four years to go (i. e., it had an original term of five years). show the timeline from your perspective. how would the timeline differ if you created it from the bank's perspective?

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Danielle Hall · Answer 1

If I have a one year loan outstanding on my car and make monthly $400 payments, my timeline would include twelve equal payments of $400 starting now. The bank's timeline would be the same twelve equal installments of $400 but they would be cash inflows since I am paying the money to the bank. I would consider the $400 a cash outflow.