Camp Elim obtains a $125,000,6%,five-year loan for a new camp bus on January 1,2018.If the monthly payment is $2,416.60,by how much will the carrying value decrease when the first payment is made on January 31,2018?

Question

Quizplus · Accepted Answer

The carrying value decreases by the principal portion of the payment. The monthly interest for the first month is 0.06/12 * $125,000 = $625. The total payment is $2,416.60, so the principal portion is $2,416.60 - $625 = $1,791.60.

Camp Elim Obtains a $125,000,6%,five-Year Loan for a New Camp