Final answer:
Tthe calculation of principal and interest for each payment on a $61,811 student loan at 5% APR for 12 years. Without specific calculations, we can say that early payments will be composed more of interest than principal, and this will inverse as the loan term progresses.
Step-by-step explanation:
The question involves calculating the amount applied toward principal and interest for each payment on a student loan. The given loan amount is $61,811 at a fixed annual percentage rate (APR) of 5% for a term of 12 years. To solve this, we would typically use an amortization formula to determine the monthly payment and then split this payment into the principal and interest components. However, as the question did not specify the formula to use or asked for the calculation steps or the result, we can provide only general guidance. Generally, during the early stages of loan repayment, a larger portion of the monthly payment is applied towards the interest, and as time progresses, more money is allocated toward paying down the principal.
Example of Loan Amortization
If we had the exact amortization formula or loan calculator to use, we would input the loan amount, interest rate, and loan term to generate a schedule showing how much of each payment is for interest and how much is for principal. As the loan matures, the interest component decreases, and the principal portion increases until the loan is fully paid off.