monthly payment principal $133,600 term length 30 years interest rate 6% monthly payment $801 how much of…

monthly payment principal $133,600 term length 30 years interest rate 6% monthly payment $801 how much of the 86th payment will go toward interest if there is an outstanding principal of $119,556? interest on 86th payment = $? round to the nearest hundredth.

monthly payment principal $133,600 term length 30 years interest rate 6% monthly payment $801 how much of the 86th payment will go toward interest if there is an outstanding principal of $119,556? interest on 86th payment = $? round to the nearest hundredth.

Answer

Explanation:

Step1: Convert annual interest rate to monthly

The annual interest rate is 6%. To get the monthly interest rate $r$, divide by 12. So $r=\frac{6%}{12}=0.005$.

Step2: Calculate interest on 86th payment

The interest portion of a loan - payment is calculated by multiplying the outstanding principal $P$ by the monthly interest rate. Here, $P = 119556$ and $r=0.005$. The interest $I$ is $I = P\times r$. $I=119556\times0.005 = 597.78$

Answer:

$597.78$