Question

You have taken out a 6060​-month, ​$24 comma 00024,000 car loan with an APR of 66​%,...

You have taken out a

6060​-month,

​$24 comma 00024,000

car loan with an APR of

66​%,

compounded monthly. The monthly payment on the loan is

​$463.99463.99.

Assume that right after you make your

5050th

​payment, the balance of the loan is

​$4 comma 514.814,514.81.

How much of your next payment goes toward principal and how much goes toward​ interest? Compare this with the prinicipal and interest paid in the first​ month's payment.

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Answer #1

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Answer:

1.

Annual percentage rate = 6%

Monthly interest rate = 6%/12 = 0.5% = 0.005

Balance of loan after 50th payment = 4514.81

Interest portion in 51st payment = 4514.81*0.005 = $22.574

Principal portion in 51st payment = $463.99 - $22.574 = $441.42

2.

Interest paid in 1st payment = $24,000 * 0.005 = $120

Principal paid in 1st payment = $463.99 - $120 = $343.99

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