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-   -   Purchase through Bank (https://www.askmehelpdesk.com/showthread.php?t=284118)

  • Nov 23, 2008, 02:10 AM
    zemhana
    Purchase through Bank
    If land is purchsed through Bank it looks :

    Land cost : $100,000.00
    Interest : $10,000.00
    Total Cost: $110,000.00

    This payment to be for one year monthly installment $ 7,916.66.
    I pay downpayment $15,000.00. And
    First month Installment $7,916.66

    For this transaction will be : (BANK A/C)
    Date Description Dr. Cr. Balance
    1/1/2008 Land through Bank $110,000.00 -$110,000.00
    1/1/2008 Downpayment $15,000.00 -$95,000.00
    31/1/2008 First Installment $7,916.66 -$87,083.34


    But on February, 2008 I SOLD the land by $150,000.
    So what will be the transactions to Bank, if I want to close their account, because there is Interest to be paid for one year?
  • Dec 12, 2008, 06:29 PM
    pready

    Yes the interest rate is determined by this formula:

    Interest = Principal (Remaining Principal owed) * Rate (annual percentage Rate) * Time ( # of months used/ 12 mon ths or # of days / either 360 bankers rule or 365 days)

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