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Installment Loan$1500.00PrincipalTerm Length4 yearsThe 40th payment has$275 left in principal.How much of thispayment will gotoward interest?Interest Rate6%Monthly Payment$35.00A. $27.50B. $7.50C. $1.38D. $33.62

Installment Loan150000PrincipalTerm Length4 yearsThe 40th payment has275 left in principalHow much of thispayment will gotoward interestInterest Rate6Monthly Pa class=

Respuesta :

Given data:

Principal = $1500.00

Term Length = 4 years

Interest Rate = 6%

Monthly Payment = $35.00

Calculate the Monthly Interest Rate:

[tex]\frac{6\text{\%}}{12}=0.5\text{\%=0.005}[/tex]

Given that the 40th payment has $275 left in the principal, the amount that will go towards interest for this payment will be the product of the monthly interest rate and principal:

[tex]0.005\times275\text{ = 1.375}[/tex]

Therefore,

the amount that would go towards interest is approximately $1.38 [Option C]

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