Engineering Board Exam Reviewer · Loan Amortization · medium
For the same loan (P500,000, 12% compounded monthly, 60 months), how much of the 25th payment goes to interest?
- P5,000
- P3,270.89
- P3,348.62
- P3,425.59
Answer
C. P3,348.62
Solution
Interest in a payment is the periodic rate times the balance at the start of the period. The balance after payment 24 is P334,862.41, so interest =0.01(334,862.41)=P3,348.62.
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