Question

You make monthly payments on your car loan. It has a quoted APR of 7.2% (monthly compounding). What percentage of the outstanding principal do you pay in interest each​ month? ​(Note: Be careful not to round any intermediate steps less than six decimal​ places.)

The percentage of the outstanding principal you pay in interest each month is ?

Answer 1

The Pecentage of outstanding principal youpay in interest each month is ___0.600000%

working notes for the above answer is as follow

you make monthly payments on your car loan. it has a quoted APR of 7.2%

APR of 7.2%

So monthly rqate is = 7.2% /12

=0.60%

APR means annual percentage rate . It is used to describe the true cost of money borrowed in the form of loans, mortgages or credit cards.

The APR basically conveys you the annual rate at which you willbe charged interest.

Example :

APR of 7.2% this would mean that for each year the loan was outstanding you would have to pay back 107.20 for every 100 you borrowed.