Length real-world example
2 answers:
You might be interested in
Answer:
a. $240.03
b. $43,205.04
c. Principal = 46.29%
Interest = 53.71%
Step-by-step explanation:
The computation is shown below:
a. For computing the monthly payment we need to apply the PMT formula i.e to be shown in the attachment below
Given that,
Present value = $25,000
Future value or Face value = 0
RATE = 12% ÷ 12 months = 1%
NPER = 15 years × 12 months = 180 months
The formula is shown below:
= PMT(RATE;NPER;-PV;FV;type)
The present value come in negative
So, after applying the above formula the monthly payment is $240.03
b. Now the total amount paid is
= Monthly payment × time period
= $240.03 × 180 months
= $43,205.04
c. Now the percentage is
For principal
= $25,000 ÷ $43,205.04 × 100
= 46.29%
And, for the interest, it is
= 100% - 46.29%
= 53.71%
