26-95 For the first monthly payment,what portion is principal and what portion is interest?
A)$100,000 principal and $10,065 interest.
B)$12,000 interest and no principal.
C)$100,000 interest and no principal.
D)$100,000 interest and $10,065 principal.
E)$10,000 interest and $2,000 principal.

Question

Quizplus · Accepted Answer

Since the loan amount is $100,000 and the interest rate is 9.5%, the total interest for one year would be $9,500 ($100,000 x 0.095). Dividing this by 12 gives us the monthly interest of $791.67 ($9,500/12). Subtracting this from the monthly payment of $10,065 gives us the monthly principal of $9,273.33 ($10,065 - $791.67). Therefore, the answer is D.

26-95 for the First Monthly Payment,what Portion Is Principal and What