Question

You borrow $24,000 . The loan is to be repaid in 60 equal monthly installments at...

You borrow $24,000 . The loan is to be repaid in 60 equal monthly installments at an annual interest rate of 6.0 percent. What percentage of your first month's payment is interest?

Homework Answers

Answer #1

The question is solved by first solving the monthly payment.

Information provided:

Present value= $24,000

Time= 60 months

Interest rate= 6%/12= 0.50% per month

The monthly payment is calculated by entering the below in a financial calculator:

PV= -24,000

N= 60

I/Y= 0.50

Press the CPT key and PMT to compute the monthly payment.

The value obtained is 463.99.

Therefore, the monthly payment is $463.99

First month's payment= 0.50*463.99

= $231.99.

Percentage of interest in first month's payment= $231.99/ $463.99*100

= 0.50*100

= 50%.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A loan of $ 10000 is to be repaid in 30 equal monthly installments with the...
A loan of $ 10000 is to be repaid in 30 equal monthly installments with the first one paid seven months after the loan is made. The nominal annual interest rate is 6 % compounded quarterly. Determine the amount of the monthly payment. Please show detailed process
You borrow $70,000 and arrange to pay off the loan in five equal annual installments. Payments...
You borrow $70,000 and arrange to pay off the loan in five equal annual installments. Payments will be made at the end of each year. The loan interest rate is 7.50 percent. What percentage of your second year's payment will go toward interest? A. 19.5 percent B. 17.2 percent C. 80.5 percent D. 28.7 percent E. 25.1 percent
A 100,000 loan is being repaid in 360 monthly installments at a 9% nominal annual interest...
A 100,000 loan is being repaid in 360 monthly installments at a 9% nominal annual interest rate compounded monthly. The first payment is due at the end of the first month. Determine which payment is the first where the amount of principal repaid exceeds the amount of interest paid. 266th 267th 268th 269th 270th
A loan of 50,000 euros is to be repaid in equal quarterly installments in five years....
A loan of 50,000 euros is to be repaid in equal quarterly installments in five years. If the annual interest rate is 7.5%, find out a) the amount of the installment, b) the total amount of the interest paid, c) interest paid quarterly, d) the first year of installments.
A loan is repaid in 12 equal annual installments, beginning in 1 year. The effective annual...
A loan is repaid in 12 equal annual installments, beginning in 1 year. The effective annual interest rate is 3.5%. The total amount of principal repaid in the 9th through 12th payments is $9,503. What is the amount of interest paid in the 4th payment? Possible answers are: 725 or 690 or 755 or 395 or 740. Thanks
Set up an amortization schedule for a $30,000 loan to be repaid in equal installments at...
Set up an amortization schedule for a $30,000 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 10% compounded annually. How much repayment of principal was included in the first payment?
Sherman Jacobs plans to borrow $10,000 and to repay it in 36 monthly installments. This loan...
Sherman Jacobs plans to borrow $10,000 and to repay it in 36 monthly installments. This loan is being made at an annual add-on interest rate of 14 percent. Calculate the finance charge on this loan, assuming that the only component of the finance charge is interest. Round the answer to the nearest cent. Use your finding in part (a) to calculate the monthly payment on the loan. Round the answer to the nearest cent. Using a financial calculator, determine the...
A loan is to be repaid by monthly installments of $800 for thirty-six months, each paid...
A loan is to be repaid by monthly installments of $800 for thirty-six months, each paid at the end of the month. The interest contained in the twelfth payment is $2.81 less than the interest contained in the eleventh payment. Find the effective monthly rate of interest.
Question 1 Jack took a $ 5,000 loan, which he repaid in monthly installments over seven...
Question 1 Jack took a $ 5,000 loan, which he repaid in monthly installments over seven months. Payments were always made at the end of the month (each payment month was 1/12 part of the year) so that the first repayment was made 4 months after the loan was drawn down. Each equal installment consisted of an installment of the loan amount of $ 5,000 / 7 and an interest component of $ 30 and an account management fee of...
Question 1 Jack took a $ 5,000 loan, which he repaid in monthly installments over seven...
Question 1 Jack took a $ 5,000 loan, which he repaid in monthly installments over seven months. Payments were always made at the end of the month (each payment month was 1/12 part of the year) so that the first repayment was made 4 months after the loan was drawn down. Each equal installment consisted of an installment of the loan amount of $ 5,000 / 7 and an interest component of $ 30 and an account management fee of...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT