Example 2: Life cycle of a 60-month loan. This graph shows the life cycle of a 60-month vehicle loan, with dollar values on the Y-axis and number of months in the loan on the X-axis. There are two lines. The first is a slightly convex line that shows the loan balance declining from $24,000 at the beginning of the loan down to $0 at the end of 60 months. The second line is a downward-curving concave line that shows the value of the vehicle declining from about $19,000 to about $8,000. The two lines cross at about month 36: Before this point, the loan balance is higher than the vehicle value; after month 36 the vehicle value is higher than the loan balance. This difference after month 36 is shown as a shaded area called the consumer's equity in the vehicle. Loan Inputs: Amount financed $24,000.00; Ending balance $0.00; Term 60 months; Monthly payment $486.63. Note: The Constant Yield (Actuarial) method is used for the loan amortization. Return