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Your friend wants to borrow $1,137.45 from you to pay off a credit card that charges a 14.7% APR. You agree to the loan but require your friend to pay you interest of 3.6% APR on the loan and your friend agrees.
Your friend pays you $200.00 at the end of the first month. How much goes toward the principal?

Respuesta :

W0lf93
$196.59  
Let's start by calculating the interest on the first month. 1137.45 * (0.036/12) = 1137.45 * 0.003 = 3.41235 
 So at the end of the 1st month, the amount owed will be 1137.45 + 3.41 = 1140.86 
 And after the 200 payment is done, the new balance will be:
 1140.86 - 200 = 940.86 
 Meaning that the principle reduced is: 1137.45 - 940.86 = 196.59 
 We could have also gotten the amount going towards the principle by subtracting the interest from the paying like: 200 - 3.41 = 196.59

The amount that goes into the principal when friend pays you $200.00 at the end of the first month is $296.56.

How to calculate the amount?

The first interest will be:

= 1137.45 × (0.036/12)

= 3.41

The amount owed at the month end will be:

= 1137.45 + 3.41

= 1140.86

The new balance after 200 payment will be:

= 1140.86 - 200

= 940.86

Therefore, the reduction in principal will be:

= 1137.45 - 940.86

= 196.59

Learn more about principal on:

https://brainly.com/question/25545513

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