If a 9%, $100,000 loan has a balance of $83,724 and an annual payment of $13,965 is to be made, what will the allocation of principal and interest be?
A) $9,000 interest, $4,965 principal
B) $7,535 interest, $6,430 principal
C) $6,430 interest, $7,535 principal
D) $4,965 interest, $9,000 principal

Question

Quizplus · Accepted Answer

The interest for the year is calculated as 9% of the remaining balance ($83,724), which is $7,535. The rest of the annual payment ($13,965 - $7,535) goes towards the principal, which is $6,430.

If a 9%, $100,000 Loan Has a Balance of $83,724