PMT = P ( APR/ n)
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1 - ( 1+ APR/n) ^(-nY)
P is the amount of the loan
APR is the annual percentage rate
Y is the years that you are paying
n is the number of payments per year
P = 17500
APR = .06 ( we want it in decimal form)
Y = 25
n = 12 since it is monthly
PMT = 17500 ( .06/ 12)
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1 - ( 1+ .06/12) ^(-12*25)
PMT = 112.75
Part B
We need to determine how much we have to pay over the life of the loan
We have 25 years, making 12 payments a year ( 12 months in a year)
25*12 = 300 payments
300 payments at 112.75 =33825.00
Part C
Lets determine how much is interest
33825 - 17500 =16325 is interest. We took the total and subtracted the principal to find the interest
interest/total * 100% = percent interest
16325/33825 * 100% = 48.263119 % Rounding to the nearest tenth = 48.3 % interest
100 -% interest = % principal
100-48.3 =51.7% 51.7 % is principal