Celebrate Holidays Company signed a 77 %, 1010minus-year note for $ 170 comma 000$170,000. The company paid an installment of $ 2 comma 500$2,500 for 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.)

Question

Eve

Business

8 December, 21:03

Celebrate Holidays Company signed a 77 %, 1010minus-year note for $ 170 comma 000$170,000. The company paid an installment of $ 2 comma 500$2,500 for 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.)

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Answers (1)

Know the Answer?

Damon Williamson · Answer 1

The first monthly payment is $1512

Explanation:

Given,

Company signed a 7 %

$2,500 for the first month

Now,

Interest expense for 1 month = ($170,000 x 7%) x (1/12) = $988

Total payment = $2,500

Principal amount ($2,500 - $988) = $1512