Duckiesaur8breadidn
Answered

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\begin{tabular}{|l|r|}
\hline \multicolumn{2}{|c|}{Installment Loan} \\
\hline Principal & [tex]$\$[/tex] 1,260[tex]$ \\
\hline Term Length & 4 years \\
\hline Interest Rate & $[/tex]15 \%[tex]$ \\
\hline Monthly Payment & $[/tex]\[tex]$ 35$[/tex] \\
\hline
\end{tabular}

How much of the 20th payment will go to interest if there is an outstanding principal of [tex]$\$[/tex] 850[tex]$?

Interest on the $[/tex]20^{\text{th}}[tex]$ Payment $[/tex]=\[tex]$[?]$[/tex]

Round to the nearest hundredth.

Sagot :

GinnyAnsweridn
To determine how much of the 20th payment will go toward interest, we need to follow these steps:

1. Determine the Annual Interest Rate: Given as 15% per year.

2. Convert the Annual Interest Rate to a Monthly Interest Rate:
[tex]\[ \text{Monthly Interest Rate} = \frac{\text{Annual Interest Rate}}{12} = \frac{15\%}{12} = 0.15 \div 12 = 0.0125 \][/tex]
or as a percentage:
[tex]\[ 0.0125 \times 100 = 1.25\% \][/tex]

3. Identify the Outstanding Principal at the time of the 20th payment, which is given as \[tex]$850. 4. Calculate the Interest Portion of the 20th Payment: \[ \text{Interest on 20th Payment} = \text{Outstanding Principal} \times \text{Monthly Interest Rate} \] Substituting the given values: \[ \text{Interest on 20th Payment} = 850 \times 0.0125 \] \[ \text{Interest on 20th Payment} = 10.625 \] 5. Round the Interest Amount to the Nearest Hundredth: \[ 10.625 \approx 10.62 \] So, the amount of the 20th payment that will go to interest is \$[/tex]10.62.
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