Question

Celebrate Holidays Company signed a 9​%,10minusyearnote for $ 167 comma 000.The company paid an installment of $ 2 comma 400for the first month. What portion of the first monthly payment is​ principal? (Do not round any intermediate​ calculations, and round your final answer to the nearest​ dollar.)

Answer 1

$1,147.50

Step-by-step explanation:

The computation of the principal amount of first monthly payment is shown below:

As we know that

Monthly payment comprises of principal + interest

Monthly payment = interest + principal

where,

Monthly payment is $2,400

Interest would be

= $167,000 × 9% ÷ 12 months

= $1,252.50

So, the principal amount is

= $2,400 - $1,252.50

= $1,147.50