Part a: The monthly payment (M) is approximately $431.76.
Part b: The amount of the monthly payment that goes to interest only (I) after 6 years is approximately $129.99.
Part c: The amount of the monthly payment that goes to the principal only (P_only) after 6 years is approximately $301.77.
Part a: Finding the Monthly Payment (M)
Using the loan payment formula:
M = (55000 * 0.00404167 * (1 + 0.00404167)^168) / ((1 + 0.00404167)^168 - 1)
Calculating this, M is approximately $431.76.
Part b: Finding the Interest-only Payment (I) after 6 Years
The loan balance formula is:
I = 32116.21 * 0.00404167
Calculating this, I is approximately $129.99.
Part c: Finding the Principal-only Payment (P_only) after 6 Years
P_only = M - I
P_only = 431.76 - 129.99
Calculating this, P_only is approximately $301.77.
The question probably maybe:
Stacy took out a loan for $55,000 over 14 years at an APR of 4.85%. a. Find her monthly payment. b. After 6 years, the balance is $32,116.21. Find the amount of the monthly payment that goes to the interest only. c. Find the amount of the monthly payment that goes to the principle only.