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1 June, 14:39

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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  1. 1 June, 17:31
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    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
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