installment loan principal $1,110 term length...
installment loan principal $1,110 term length 2 1/2 years interest rate 12% monthly payment $43 how much of the 26th payment will go to interest if there is an outstanding principal of $209? interest on 26th payment = $? round to the nearest hundredth.
Answer
# Answer:
$2.09
# Explanation:
## Step1: Convert annual rate to monthly rate
The annual interest rate is 12%, so the monthly interest rate $r=\frac{12\%}{12}=1\% = 0.01$.
## Step2: Calculate interest for 26th payment
The interest portion of a loan - payment is calculated based on the outstanding principal. The formula for the interest portion of a payment is $I = P\times r$, where $P$ is the outstanding principal and $r$ is the monthly interest rate. Given $P = 209$ and $r=0.01$, then $I=209\times0.01 = 2.09$.