Question

The following table shows a portion of a five-year amortization schedule. A 5-year amortization schedule. Loan amount or principal: 10,900 dollars. Interest rate on loan: 10.95 percent. A 5-column table with 6 rows. Column 1 is labeled Month with entries 15, 16, 17, 18, 19, 20. Column 2 is labeled Payment with all entries 236.72. Column 3 is labeled Principal with entries 155.87, 157.29, 158.73, 160.18, 161.64, 163.11. Column 4 is labeled Interest with entries 80.85, 79.43, 77.99, 76.54, 75.08, 73.61. Column 5 is labeled Balance with entries 8,704.27, 8,546.98, 8,388.25, 8228.07, 8.066.43, 7,903.32. What percent of the payments made were due to interest for the months shown? a. 30.9% b. 32.6% c. 62.5% d. 63.4%

Answer 1

what percent of the payments made were due to interest for the months shown?

A. 30.9%

B. 32.6%

C. 62.5%

D. 63.4%

answer is : B. 32.6%

- i got it right on the test

Answer 2

b. 32.6%

Explanation:

Monthly Payment =$236.72

Total Payment =6X$236.72=$1420.32

Total Interest Paid=80.85+79.43+77.99+76.54+75.08+73.61=$463.50

Percentage of Payment Due to Interest

=(Total Interest Paid/Total Payment )X100

=(463.50/1420.32)X100

=32.6%.

The correct option is B.