Answer:
<u>a. The interest is US$ 8.20</u>
<u>b. The payment to principal is US$ 125.</u>
<u>c. The new balance is: US$ 1,465.20 (including principal and interest) or US$ 1,375 (just the principal).</u>
Step-by-step explanation:
1. Let's review the information given to answer this question correctly:
Loan obtained by Ralph Phillips = US$ 1,500
Time of paying back the loan = 12 months
Interest rate of the loan = 12%
Monthly payment = US$ 133.20
2. Let's find a, b and c.
The principal is US$ 1,500. Dividing it by 12 months, the monthly payment of principal is US$ 125. Therefore,
<u>a. The interest is (133.20 - 125) = US$ 8.20</u>
<u>b. The payment to principal is US$ 125.</u>
<u>c. The new balance is: US$ 1,465.20 (including principal and interest) or US$ 1,375 (just the principal).</u>
