Trek Company signed a 9%, 10-year note for $150,000. The company paid $1,900 as the installment for the first month. What portion of the first monthly payment is principal?

Question

Quizplus · Accepted Answer

The monthly interest on the note is calculated as ($150,000 * 9% / 12) = $1,125. The principal portion of the payment is the total payment minus the interest, which is $1,900 - $1,125 = $775.

Trek Company Signed a 9%, 10-Year Note for $150,000