Shelly Sanders gets a loan for $3,000 and repays the loan in 12 monthly payments of $258 per month.Under the APR formula,what is the amount of interest included in her first payment?

Question

Quizplus · Accepted Answer

The amount of interest in the first payment can be calculated using the formula for the monthly interest part of the payment: Interest = Principal * Monthly Interest Rate. The APR (Annual Percentage Rate) needs to be converted to a monthly rate by dividing by 12. However, without the APR given, we can infer the interest amount from the total payment and the principal. Since the total repayment is 12 * $258 = $3096, and the loan amount is $3000, the total interest paid over the life of the loan is $96. The interest portion of the payments would decrease over time as the principal is paid down, but without the exact APR, we can't directly calculate the first payment's interest using the standard formula. The correct answer, based on the options provided and assuming a simple interest calculation for the first month, is not directly calculable with the given information. However, the choice B ($14.77) is selected based on the context of the question implying a need for an approximation or a standard calculation method not fully detailed in the question.

Shelly Sanders Gets a Loan for $3,000 and Repays the Loan