installment loan principal $2,240 term length 2 1/2 years interest rate 15% monthly payment $90 how much of…

installment loan principal $2,240 term length 2 1/2 years interest rate 15% monthly payment $90 how much of the 11th payment will go to interest if there is an outstanding principal of $1,584? interest on 11th payment = $?

installment loan principal $2,240 term length 2 1/2 years interest rate 15% monthly payment $90 how much of the 11th payment will go to interest if there is an outstanding principal of $1,584? interest on 11th payment = $?

Answer

Answer:

$19.8$

Explanation:

Step1: Convert annual rate to monthly rate

The annual interest rate is $15%=0.15$. The monthly - interest rate $r=\frac{0.15}{12}=0.0125$.

Step2: Calculate interest on 11th payment

The interest on a payment is calculated based on the outstanding principal. The outstanding principal is $P = 1584$. The interest $I$ on the 11th payment is $I=P\times r$. Substitute $P = 1584$ and $r = 0.0125$ into the formula: $I=1584\times0.0125 = 19.8$.