Question

Ralph Phillips obtained a 12-month, $1500.00 loan at 12%. His monthly payment is $133.20. For the first payment find:

Answer 1

Answer:

a. The interest is  US$ 8.20

b. The payment to principal is US$ 125.

c. The new balance is: US$ 1,465.20 (including principal and interest) or US$ 1,375 (just the principal).

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,

a. The interest is (133.20 - 125) = US$ 8.20

b. The payment to principal is US$ 125.

c. The new balance is: US$ 1,465.20 (including principal and interest) or US$ 1,375 (just the principal).