Question

installment loan
principal $1,190
term length 2 years
interest rate 12%
monthly payment $56
how much of the 19th payment will go to principal if there is an outstanding principal of $325?
interest on 19th payment = $3.25
principal on 19th payment = $?

Explanation:

Step1: Recall the relationship between monthly payment, interest, and principal payment.

The monthly payment is the sum of the interest payment and the principal payment for that month. So, Principal Payment = Monthly Payment - Interest Payment.

Step2: Substitute the given values.

Monthly Payment is $56, and Interest on 19th Payment is $3.25. So, Principal on 19th Payment = $56 - $3.25.

Step3: Calculate the result.

$56 - $3.25 = $52.75.

Answer:

$52.75