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17 May, 01:59

Trek Holidays company signed a 7%, 10 - year note payable for $166,000. The company paid an instalment of $2,500 for the first month. What portion of the monthly payment is principal? (Do not round any intermediate calculations, and round your final answer to the nearest dollar.)

a. $1,532

b. $16,333

c. $4,980

d. $4,032

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Answers (1)
  1. 17 May, 04:12
    0
    a. $1,532

    Explanation:

    The note payable is 166,000 and 7% so the yearly interest on the note payable is 0.07*166,000=11,620

    In order to find the monthly interest rate we will divide 11,620 by 12

    11,620/12=968.3

    In order to find the monthly principal we will subtract the monthly interest from

    the monthly payment of 2,500

    2,500-968.3=1,531

    We can round that of to 1532 for the answer from the options.
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