On January 1, Pablo borrows $5,000 with a fixed interest rate on the loan of 10% and a loan term of 2 years. He will be making monthly payments of $230.72. How much of Pablo's second loan payment would be interest charged?

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To calculate the interest portion of Pablo's second loan payment, we first need to determine the amount of the first payment that goes towards the interest and the principal. The interest for the first month is calculated on the initial loan amount. Since the loan has a 10% annual interest rate, the monthly interest rate is 10% / 12 = 0.8333%.Interest for the first month = $5,000 * 0.8333% = $41.67.Therefore, the principal portion of the first payment is $230.72 (total monthly payment) - $41.67 (interest portion) = $189.05.After the first payment, the remaining principal = $5,000 - $189.05 = $4,810.95.The interest for the second month is calculated on this new principal amount.Interest for the second month = $4,810.95 * 0.8333% = $40.09.Thus, the interest charged in Pablo's second loan payment is $40.09.

On January 1, Pablo Borrows $5,000 with a Fixed Interest