Question

Kyle used the Quantitative Reasoning Procees to create a plan to pay off his gtudent loang of $4.160. The interest rate on his loan is 2.3% annually and he plans to make monthly payments of $38.84 for 10 years. Complete months 1 and 2 of the amortization table below How much of Kyle's payment goes to Interest in Month 2? Month Beginning BalancePayment: To Interest Payment To PrincipatEnding Balance 2 2? 3 $11.44 $7.899 $4129 $7973 $7914

Answer 1

Answer: 7.899

interest per month- Monthly Payment- (2.3/12)96 38.84 4 5 Month Beginning Balance 6 7 Payment to Interest 4160(2.3/12)% of 4160-7.973 4121.16 (2.3/12)% of 4121.16-7.899 Payment to Principal Ending Balance 38.84-7.973-30.87 38.84-7.899-30.94 4160-38.84-4121.16

• The per month interest rate will be ( 2.3/12 )% =r (say)
• The beginning balance for the first month is going to be the amount owed at the beginning = amount borrowed=4160.
• Payment to interest is calculated by calculating the interest on the corresponding month's beginning balance= r*beginning balance.
• Payment to principal is the amount that is paid in the month over and above the payment towards interest= monthly payment - payment to interest for the month.
• the ending balance of the loan account will be the beginning balance of the next month because that is what is the new amount owed= Beginning balance- monthly payment.