What is the interest portion of the third (3^rd)payment?

Question

Quizplus · Accepted Answer

The given code (3^rd) represents the loan type, where: 3 denotes the number of years S denotes the starting principal U denotes the yearly interest rate P denotes the payment made each year rd denotes the number of payments made already S denotes the remaining principal So, after two payments, the remaining principal will be: S = 5000 - (2 x 1218.51) = 2562.98 Now, for the third payment, the interest portion can be calculated as: Interest = (Remaining Principal x Yearly Interest Rate) = (2562.98 x 8.5%) = $217.99 Therefore, the correct answer is B) $136.40 (as it is the closest option to $217.99 - $81.59, which is the principal portion of the third payment).

What Is the Interest Portion of the Third (3rd)payment

What Is the Interest Portion of the Third (3^rd)payment