Question

Solve the problem. Round to the nearest cent as needed.The monthly payments on a $73,000 loan at 13% annual interest are $807.38. How much of the first monthly payment will go toward the principal?

Answer 1

Answer:

$790.83

Explanation:

The computation of the first monthly payment toward the principal is shown below:

First, we have to find out the interest payment for the first year i.e

= Monthly payment × annual interest rate

= $73,000 × 13%

= $9,490

Now the first monthly payment towards the principal is

= Interest payment for the first year ÷ total number of months in a year

= $9,490 ÷ 12 months

= $790.83