Question

Madison Davidson negotiated for a $30,000 loan with $200 monthly payments, plus 9 percent interest. In this case, what is the monthly interest in the first month?

Answer 1

Answer:

$225

Explanation:

Remember, the interest rates of a loan are spread out equally each month.

Therefore, we calculated the value of the total interest in dollars for a year:

30,000/100 x 9 = $2,700 (annual interest in dollars)

Next, we divide the annual interest in dollars by 12 to get the value from the first month:

$2700/12= $225 (First month interest in dollars)