Answer:
90.45%
Step-by-step explanation:
We will be solving this problem by using a formula that gives us the monthly payment installments on a loan, with other supporting equations.
We are given,
Principal = $72,500
Nominal Rate = 11.0%
Duration = 1 year
The monthly interest rate can be calculated as follows.
Monthly Interest = (11 /12) = 0.917%
For calculating equal installment payments on the loan, we use
Installment Amount = Principal / Present V. A Factor
V.A - Value Annuity
Present V.A = (1 - (1 + r)^(-n)) / r
where
r = monthly interest rate
n = number of payments
For the 1-year duration mentioned in the question, the number of total payments would be 12.
Thus, the present V.A would be
Present V.A Factor = (1 - (1 + 0.00917)^(-12)) / 0.00917
Present V.A Factor = 10.63
Therefore, the monthly installment amount is:
Installment amount = 72,500 / 10.63
Installment amount = $6,820.31
Finding a portion of the second monthly payment allocated,
Interest portion = Principal * Interest rate
Interest portion = 72,500 * 0.00917
Interest portion = $665.22
The principal portion of the second-month payment is
$6,820.31 - $665.22 = $6,155.09.
Percentage of 2nd monthly payment for principal = (6,155.09 / 6,820.31) * 100
Percentage of 2nd monthly payment for principal = 90.45%
Therefore, the percentage of the 2nd Monthly payment which goes towards loan repayment will be 90.45%