I have a homework assignment I have to do. I know the monthly payments (1400) the interest rate (8%) the amount of the loan (180,000) and the number of months I have to pay it off (36). What I’m trying to figure out the interest for each month I make a payment. Please help.
1 Comment(s)
You need to prepare a schedule of amortization. The monthly payment is made of principal and interest. Since the interest rate is 8% per annum, the first month’s interest will be 180,000 x 8%/12 = 1,200. Now the monthly payment of 1400 has 1,200 as interest and 200 as the principal.
Next month you will pay interest on 180,000 – 200 = 179,800 and so on.
I think there is something wrong with your question, 1400 per month for 36 months makes it 50400, which is nowhere near to the loan amount. Perhaps you need to recheck.
You need to prepare a schedule of amortization. The monthly payment is made of principal and interest. Since the interest rate is 8% per annum, the first month’s interest will be 180,000 x 8%/12 = 1,200. Now the monthly payment of 1400 has 1,200 as interest and 200 as the principal.
Next month you will pay interest on 180,000 – 200 = 179,800 and so on.
I think there is something wrong with your question, 1400 per month for 36 months makes it 50400, which is nowhere near to the loan amount. Perhaps you need to recheck.
rehman vohra | Sep 30, 2009 | Reply