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1 April, 13:50

2. Rita Rodriguez obtained a 24-month, $8,500 loan at 8 percent from Tri-County

Savings & Loan. Her monthly payment is $384.20. For the first payment:

a. What is the interest?

b. What is the payment to principal?

c. What is the new balance?

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Answers (1)
  1. 1 April, 15:20
    0
    a. What is the interest? $ 56.67

    b. What is the payment to principal? $ 327.53

    c. What is the new balance? $ 8,172.47

    Step-by-step explanation:

    1. Let's review the information given to us to answer the question correctly:

    Time of the loan = 24 months

    Amount of the loan = $ 8,500

    Interest rate = 8% = 0.08 annually

    Monthly payment = $ 384.20

    2. For the first payment:

    a. What is the interest?

    Interest amount = Amount of the loan * Interest rate/Number of payments per year

    Replacing with the values we know:

    Interest amount = 8,500 * 0.08/12

    Interest amount = 8,500 * 0.0066

    Interest amount = $ 56.67

    b. What is the payment to principal?

    Payment to principal = Monthly payment - Interest amount

    Replacing with the values we know:

    Payment to principal = 384.20 - 56.67

    Payment to principal = $ 327.53

    c. What is the new balance?

    New balance = Beginning balance - Payment to principal

    Replacing with the values we know:

    New balance = 8,500 - 327.53

    New balance = $ 8,172.47
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