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\begin{tabular}{|l|r|}
\hline \multicolumn{2}{|c|}{Installment Loan} \\
\hline Principal & \[tex]$1,810 \\
\hline Term Length & $[/tex]3 \frac{1}{2}[tex]$ years \\
\hline Interest Rate & 12\% \\
\hline Monthly Payment & \$[/tex]53 \\
\hline
\end{tabular}

How much of the 31st payment will go to principal if there is an outstanding principal of \[tex]$596?

Interest on 31st Payment = \$[/tex]5.96

Principal on 31st Payment = \$[?]

Round to the nearest hundredth.



Answer :

GinnyAnswer
To determine how much of the 31st payment goes towards the principal, follow these steps:

1. Identify the total monthly payment made.
- The monthly payment is \[tex]$53. 2. Identify the interest portion of the payment. - The interest payment for the 31st installment is \$[/tex]5.96.

3. Subtract the interest payment from the total monthly payment to find the principal payment.
- The principal payment is calculated by subtracting the interest payment from the total monthly payment:
[tex]\[ \text{Principal Payment} = \text{Monthly Payment} - \text{Interest Payment} \][/tex]
[tex]\[ \text{Principal Payment} = 53 - 5.96 \][/tex]

4. Simplify the principal payment calculation:
[tex]\[ 53 - 5.96 = 47.04 \][/tex]

5. Round the result to the nearest hundredth if necessary.

So, the principal portion of the 31st payment is \$47.04.

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