To determine how much of the 16th payment will go towards interest, given the outstanding principal of \[tex]$4,112 and an annual interest rate of 12%, let's break down the solution step-by-step:
1. Determine the Monthly Interest Rate:
- The annual interest rate is 12%.
- To convert this to a monthly interest rate, divide the annual rate by 12 (because there are 12 months in a year):
\[
\text{Monthly Interest Rate} = \frac{12\%}{12} = 1\%
\]
2. Calculate the Interest on the Outstanding Principal:
- The outstanding principal is \$[/tex]4,112.
- The monthly interest rate is 1% (or 0.01 in decimal form).
[tex]\[
\text{Interest on 16th Payment} = 4,112 \times 0.01
\][/tex]
3. Compute the Interest Amount:
- Perform the multiplication:
[tex]\[
4,112 \times 0.01 = 41.12
\][/tex]
Thus, the amount of the 16th payment that will go towards interest is \$41.12.
