Question

Based on the information below, choose the correct answers. Note: The monthly loan payment was calculated at 119 payments of $330.38 plus a final payment of $329.73. Loan Balance: $25,000.00 Loan Interest Rate: 10.0% Monthly Loan Payment: $330.38 Number of Payments: 120 Cumulative Payments: $39,644.95 Total Interest Paid: $14,644.95 On average, what dollar amount of each monthly payment is interest? $ What percent of the total payments is total interest? %

Answer 1

Answer:

• $122.04
• 36.94%

Step-by-step explanation:

a) The amount of concern is ...

  (total interest)/(number of payments) = interest/payment

  $14,644.95/120 ≈ $122.04 . . . . amount of interest per payment

__

b) The ratio of concern is ...

  (total interest)/(total payments) × 100% = 14,644.95/39,644.95 × 100%

  ≈ 36.94% . . . . percent of total payments that is interest