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10 October, 19:06

Tony borrows $3300 at an annual interest rate of 6.0%. He receives the loan on the first day of the current month and will make monthly payments on the first day of each of the following months until the loan is repaid after 24 months (2-year loan). The monthly loan payment is $146.26. How much interest will Tony pay as part of the first loan payment

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  1. 10 October, 19:26
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    Tony will pay interest of $16.5 as part of the first loan payment

    Explanation:

    Monthly loan payment includes the interest portion of the month and and principal payment for the month.

    As per given data

    Amount of Loan = $3,300

    Interest rate = 6% annually = 0.5% monthly

    Loan Payment per month = $146.26

    First calculate the monthly interest on the due balance

    Interest payment = Amount due x Interest rate

    Interest payment = $3,300 x 0.5% = $16.5

    Now calculate the principal payment after deducting the interest portion from the monthly payment.

    Principal Payment = $146.26 - $16.5 = $129.76
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Home » Business » Tony borrows $3300 at an annual interest rate of 6.0%. He receives the loan on the first day of the current month and will make monthly payments on the first day of each of the following months until the loan is repaid after 24 months (2-year loan).
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